Gold Gains Ground, Puts Brakes on Dollar Rally

Gold has posted gains in the Thursday session, erasing the losses seen on Wednesday. In North American trade, the spot price for an ounce of gold is $1331.17, up 0.50% on the day. On the release front, unemployment claims dropped to 222 thousand, well below the estimate of 230 thousand.

Gold prices remain continue to fluctuate. The base metal has lost 1.3% this week, erasing much of last week’s gains. Concerns that strong US numbers could stoke inflation and more rate hikes sparked the recent turbulence in global stock markets. This has triggered volatility in gold, as gold prices are sensitive to moves (or expected moves) in interest rates. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018.

The Federal Reserve released the minutes of its January meeting, and as expected, the benchmark rate was left unchanged at a rate between 1.25% and 1.50%. The message from policymakers was that further rate hikes could be in the cards, due to strong economic conditions in the US. In the words of the minutes, policymakers “anticipated that the rate of economic growth in 2018 would exceed their estimates of its sustainable longer-run pace and that labor market conditions would strengthen further”. At the December meeting, the Fed penciled in three rate hikes in 2018, and there was no reference to a quicker pace of hikes in the January minutes. As for inflation, the minutes did not reveal any concern. Most Fed members were of the opinion that inflation would rise towards the Fed target of 2 percent.

 

XAU/USD Fundamentals

Thursday (February 22)

  • 00:15 US FOMC Member Randal Quarles Speaks
  • 8:30 US Unemployment Claims. Estimate 230K. Actual 222K
  • 10:00 US CB Leading Index. Estimate 0.7%. Actual 1.0%
  • 10:00 US FOMC Member William Dudley Speaks
  • 10:30 US Natural Gas Storage. Estimate -121B. Actual -124B
  • 11:00 US Crude Oil Inventories. Estimate 2.2M. Actual -1.6M
  • 12:10 US FOMC Member Raphael Bostic Speaks 

*All release times are GMT

*Key events are in bold

 

XAU/USD for Thursday, February 22, 2018

XAU/USD February 22 at 12:40 EST

Open: 1324.57 High: 1331.37 Low: 1321.03 Close: 1331.17

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD showed little movement in the Asian and European sessions. The pair has posted gains in North American trade
  • 1307 is providing support
  • 1337 is the next resistance line
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing strong movement towards long positions. Currently, short positions have a slim majority (51%), indicative of a lack of trader bias as to what direction XAU/USD will take next.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – Pound Shrugs Off Soft GDP Report

The British pound has posted slight gains in the Thursday session. In North American trade, GBP/USD is trading at 1.3943, up 0.18% on the day. On the release front, British Second Estimate GDP for the fourth quarter remained unchanged at 0.4%, shy of the estimate of 0.5%. Preliminary Business Investment for Q4 dropped to 0.0%, missing the estimate of 0.5%. In the US, unemployment claims dropped to 222 thousand, well below the estimate of 230 thousand.

British GDP for Q4 was a disappointment, but the pound has managed to hold its own against the dollar. GDP was revised downwards to 0.4%, down from 0.5% in the initial estimate. Looking at growth for all of 2017, GDP was revised lower from 1.8% to 1.7%, its worst showing since 2012. The weak readings are being attributed to lower production and weaker consumer spending. Consumers are being squeezed by a weaker British pound as well as high inflation, which is running at a 3% clip, compared to the BoE target of 2%.

The Bank of England has been hinting that it could accelerate the pace of rate hikes, and this was further reinforced on Wednesday, as BoE Chief Economist Andy Haldane said that interest rates might need to climb faster than previously expected, in order to bring down inflation to the BoE’s target of 2 percent. The Bank has been reluctant to raise rates in order to lower inflation, but may be running out of options, as inflation hovers at 3 percent and continues to erode the purchasing power of consumers. The Bank has taken pains to be transparent with the markets, stating recently that the pace of rate hikes could be accelerated and larger hikes than previously forecast could be on the way.

 

GBP/USD Fundamentals

Thursday (February 22)

  • 00:15 US FOMC Member Randal Quarles Speaks
  • 4:30 British Second Estimate GDP. Estimate 0.5%. Actual 0.4%
  • 4:30 British Preliminary Business Investment. Estimate 0.5%. Actual 0.0%
  • 8:30 US Unemployment Claims. Estimate 230K. Actual 222K
  • 10:00 US CB Leading Index. Estimate 0.7%. Actual 1.0%
  • 10:00 US FOMC Member William Dudley Speaks
  • 10:30 US Natural Gas Storage. Estimate -121B. Actual -124B
  • 11:00 US Crude Oil Inventories. Estimate 2.2M. Actual -1.6M
  • 12:10 US FOMC Member Raphael Bostic Speaks 

*All release times are GMT

*Key events are in bold

 

GBP/USD for Thursday, February 22, 2018

GBP/USD February 22 at 11:55 EDT

Open: 1.3917 High: 1.3959 Low: 1.3857 Close: 1.3939

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3744 1.3809 1.3901 1.4010 1.4128 1.4271

GBP/USD ticked lower in the Asian and European sessions. The pair has reversed directions and moved higher in North American trade

  • 1.3901 is providing support
  • 1.4010 is the next resistance line

Current range: 1.3901 to 1.4010

Further levels in both directions:

  • Below: 1.3901, 1.3809 and 1.3744
  • Above: 1.4010, 1.4128, 1.4271 and 1.4345

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in the Thursday session. Currently, short positions have a majority (55%), indicative of trader bias towards GBP/USD continuing to move to lower ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

CAC Ticks Lower, Eurozone CPI Ahead

The CAC index has posted slight losses in the Thursday session. Currently, the index is at 5,299.00, down 0.06% since the close on Wednesday. On the release front, French CPI declined 0.1%, matching the forecast. This marked the first decline in four months.As well, the ECB released the minutes of its January policy meeting. On Friday, the eurozone publishes Final CPI.

It’s been a rough ride February for global stock markets, and the CAC has shed 3.9 percent so far this month. Much of the correction can be attributed to concerns of tighter policy from both the Federal Reserve and the ECB. Ironically, these concerns have been heightened by strong economic data in the eurozone and the US, which have stoked fear of higher inflation and more rate hikes. Analysts are forecasting that the Fed could change its projection of three hikes in 2018, and could press the rate trigger four or five times. As for the ECB, it appears in no rush to raise interest rates anytime soon, and there is little pressure to do so, as there is plenty of slack in the economy. However, the ECB asset purchase program is scheduled to wind up in September, and if eurozone growth remains solid and inflation moves upwards, there will be pressure on the ECB to raise rates in the fourth quarter of 2018 or early in 2019.

The Federal Reserve released the minutes of its January meeting, and as expected, the benchmark rate was left unchanged at a rate between 1.25% and 1.50%. The message from policymakers was that further rate hikes could be in the cards, due to strong economic conditions in the US. In the words of the minutes, policymakers “anticipated that the rate of economic growth in 2018 would exceed their estimates of its sustainable longer-run pace and that labor market conditions would strengthen further”. At the December meeting, the Fed penciled in three rate hikes in 2018, and there was no reference to a quicker pace of hikes in the January minutes. As for inflation, the minutes did not reveal any concern. Most Fed members were of the opinion that inflation would rise towards the Fed target of 2 percent.

 

Economic Calendar

Thursday (February 22)

  • 2:45 French Final CPI. Estimate -0.1%. Actual -0.1%
  • 7:30 ECB Monetary Policy Meeting Accounts

Friday (February 23)

  • 5:00 Eurozone Final CPI.  Estimate 1.3%

*All release times are GMT

*Key events are in bold

CAC, Thursday, February 22 at 9:40 EDT

Open: 5,271.00 High: 5,296.30 Low: 5,253.30 Close: 5,299.00

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Gold in Holding Pattern Ahead of Federal Reserve Minutes

Gold is steady in the Wednesday session, following sharp losses on Tuesday. In North American trade, the spot price for an ounce of gold is $1329.08, down 0.05% on the day. On the release front, all eyes are on the Federal Reserve, which will release the January minutes later in the day. Earlier, Existing Home Sales disappointed, dropping to 5.38 million. This was well short of the estimate of 5.61 million. On Thursday, the US will release unemployment claims.

Gold prices remain under pressure, as the metal has lost 1.5% this week, erasing much of last week’s gains. Concerns that strong US numbers could stoke inflation and more rate hikes sparked the recent turbulence in global stock markets. This has triggered volatility in gold, as gold prices are sensitive to moves (or expected moves) in interest rates. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. Traders should be prepared for some movement from gold later in the North American session, as the minutes could provide some clues regarding future rate policy.

It’s been a busy start for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018.  Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

XAU/USD Fundamentals

Wednesday (February 21)

  • 9:45 US Flash Manufacturing PMI. Estimate 55.4. Actual 55.9
  • 9:45 US Flash Services PMI. Estimate 53.8. Actual 55.9
  • 10:00 US Existing Home Sales. Estimate 5.61M. Actual 5.38M
  • 14:00 US FOMC Meeting Minutes

Thursday (February 22)

  • 8:30 US Unemployment Claims. Estimate 230K

*All release times are GMT

*Key events are in bold

XAU/USD for Wednesday, February 21, 2018

XAU/USD February 21 at 12:35 EST

Open: 1329.66 High: 1333.04 Low: 1325.27 Close: 1329.08

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD posted losses in the Asian and European sessions. The pair continues to lose ground in North American trade
  • 1307 is providing support
  • 1337 has switched to a resistance role following losses from XAU/USD on Tuesday
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight movement towards short positions. Currently, short positions have a majority (60%), indicative of trader bias towards XAU/USD breaking out and moving lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – Strong UK Employment Numbers Fail to Rally Pound, Fed Minutes Loom

The British pound has posted losses in the Wednesday session. In North American trade, GBP/USD is trading at 1.3946, down 0.37% on the day. On the release front, British employment numbers were solid. Wage growth remained at 2.5%, matching the forecast. Unemployment rolls declined 7.2 thousand, crushing the estimate of a 2.3 thousand gain. However, the unemployment rate ticked up to 4.4%, above the estimate of 4.4%. In the US, the key event is the Federal Reserve minutes from the January meeting. Earlier, Existing Home Sales disappointed, dropping to 5.38 million. This was well short of the estimate of 5.61 million. On Thursday, the UK releases revised GDP for the fourth quarter as well as Preliminary Business Investment. The US will publish unemployment claims.

The Bank of England has been hinting that it could speed up the pace of rate hikes, and this was further reinforced on Wednesday, as BoE Chief Economist Andy Haldane said that interest rates might need to climb faster than previously expected, in order to bring down inflation to the BoE’s target of 2 percent. The Bank has been reluctant to raise rates in order to lower inflation, but may be running out of options, as inflation hovers at 3 percent and continues to erode the purchasing power of consumers. The Bank has taken pains to be transparent with the markets, stating recently that the pace of rate hikes could be accelerated and larger hikes than previously forecast could be on the way.

It’s been a busy start for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

 

GBP/USD Fundamentals

Wednesday (February 21)

  • 4:30 British Average Earnings Index. Estimate 2.5%. Actual 2.5%
  • 4:30 British Claimant Count Change. Estimate 2.3K. Actual -7.2K
  • 4:30 British Public Sector Net Borrowing. Estimate -11.5B. Actual -11.6B
  • 4:30 British Unemployment Rate. Estimate 4.3%. Actual 4.4%
  • 9:15 British Inflation Report Hearings 
  • 9:45 US Flash Manufacturing PMI. Estimate 55.4. Actual 55.9
  • 9:45 US Flash Services PMI. Estimate 53.8. Actual 55.9
  • 10:00 US Existing Home Sales. Estimate 5.61M. Actual 5.38M
  • 14:00 US FOMC Meeting Minutes

Thursday (February 22)

  • 4:30 British Second Estimate GDP. Estimate 0.5%
  • 4:30 British Preliminary Business Investment. Estimate 0.5%
  • 8:30 US Unemployment Claims. Estimate 230K

*All release times are GMT

*Key events are in bold

 

GBP/USD for Wednesday, February 21, 2018

GBP/USD February 21 at 12:10 EDT

Open: 1.3996 High: 1.4009 Low: 1.3994 Close: 1.3946

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3744 1.3809 1.3901 1.4010 1.4128 1.4271

GBP/USD edged lower in Asian trade and posted stronger losses in the European session. GBP/USD has posted small gains in North American trade

  • 1.3901 is providing support
  • 1.4010 is the next resistance line

Current range: 1.3901 to 1.4010

Further levels in both directions:

  • Below: 1.3901, 1.3809 and 1.3744
  • Above: 1.4010, 1.4128, 1.4271 and 1.4345

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in the Wednesday session. Currently, short positions have a majority (57%), indicative of trader bias towards GBP/USD continuing to move to lower ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

DAX Under Pressure, Investors Eye Fed Minutes

The DAX index has posted losses in the Wednesday session. Currently, the index is trading at 12,428.50 down 0.48% since the Tuesday close. On the release front, German and Eurozone Manufacturing PMIs slowed in January. The German PMI dipped to 60.3, shy of the estimate of 60.6 points. It was a similar story with the Eurozone PMI, which dropped to 58.5, shy of the estimate of 59.2 points. In the US, the key event is the Federal Reserve minutes from the January meeting.

It continues to be a blue February for the DAX, which has declined 6.2% so far this month. The correction on the US stock markets has sent European markets lower, although the DAX managed to gain ground last week, as European corporate earnings were generally strong. Will the stock market volatility resume? The markets are keeping a close eye on the Fed minutes, which could provide a hint of future rate policy. . Recent US numbers have been strong, and inflation indicators have been pointing upwards. This has raised concerns that the Fed may accelerate its pace of hikes, which triggered a sharp correction in global stock markets. The new chair of the Fed, Jerome Powell has tried to reassure the markets that the Fed is monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

It’s been a wild, wild ride for Bitcoin, the most popular virtual currency. Bitcoin has fluctuated between $900 and $19,000 over the past years. These wild swings have drawn the attention of policymakers and lawmakers, as there are growing concerns that virtual currencies could have a negative economic impact. France and Germany want to put virtual currencies on the agenda at the next G-20 meeting, and there is bipartisan support in Congress to adopt new rules to regulate virtual currencies. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB’s responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions.

Economic Calendar

Wednesday (February 21)

  • 3:30 German Flash Manufacturing PMI. Estimate 60.6
  • 4:00 German Flash Services PMI. Estimate 56.9
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 59.2
  • 4:00 Eurozone Flash Services PMI. Estimate 57.7
  • 14:00 US FOMC Meeting Minutes

*All release times are EST

*Key events are in bold

 

DAX, Wednesday, February 21 at 8:50 EDT

Open: 12,451.96 High: 12,512.00 Low: 12,426.50 Close: 12,428.50

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

USD/CAD – Canadian Dollar Subdued Ahead of Fed Minutes

The Canadian dollar has recorded slight losses in the Tuesday session. Currently, USD/CAD is trading at 1.2669, up 0.16% on the day. On the release front, there are no Canadian releases on the schedule. In the US, the key event is the Federal Reserve minutes from the January meeting. We’ll also get a look at Existing Home Sales, which are expected to climb to 5.61 million. On Thursday, Canada releases retail sales reports and the US will publish unemployment claims.

The week started on a sour note for Canadian indicators, as Wholesales Sales declined 0.5%, short of the estimate of 0.4%. It marked the first decline in three months. The markets are expecting another soft release from Core Retail Sales, a key barometer of consumer spending. The indicator posted a strong gain of 1.6% in December, but is forecast to slow to just 0.1% in January. If consumer spending posts a weak reading, the Canadian dollar could lose more ground. The pair is under pressure, and has shed 1.0% so far this month.

It has been an eventful few weeks for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

 

 

USD/CAD Fundamentals

Wednesday (February 21)

  • 9:45 US Flash Manufacturing PMI. Estimate 55.4
  • 9:45 US Flash Services PMI. Estimate 53.8
  • 14:00 US FOMC Meeting Minutes

Thursday (February 22)

  • 8:30 Canadian Core Retail Sales. Estimate 0.1%
  • 8:30 Canadian Retail Sales. Estimate 0.0%

*All release times are GMT

*Key events are in bold

 

USD/CAD for Wednesday, February 21, 2018

USD/CAD, February 21 at 7:40 EST

Open: 1.2548 High: 1.2671 Low: 1.2640 Close: 1.2669

 

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.2351 1.2494 1.2630 1.2757 1.2855 1.2920

USD/CAD has posted small gains in the Asian and European sessions

  • 1.2494 is providing support
  • 1.2630 is a weak resistance line
  • Current range: 1.2494 to 1.2630

Further levels in both directions:

  • Below: 1.2630, 1.2494, 1.2351 and 1.2190
  • Above: 1.2757, 1.2855 and 1.2920

OANDA’s Open Positions Ratio

USD/CAD ratio is showing little movement in the Wednesday session. Currently, short positions have a slender majority (52%), indicative of slight trader bias towards USD/CAD reversing directions and moving lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

EUR/USD – Euro Ticks Lower as German Manufacturing PMI Softens

The euro has posted small losses in the Wednesday session. Currently, the pair is trading at 1.2317, down 0.16% on the day. On the release front, German and Eurozone Manufacturing PMIs slowed in January. The German PMI dipped to 60.3, shy of the estimate of 60.6 points. It was a similar story with the Eurozone PMI, which dropped to 58.5, shy of the estimate of 59.2 points. In the US, the key event is the Federal Reserve minutes from the January meeting. The US will release Existing Home Sales, which are expected to climb to 5.61 million.

The Federal Reserve will be in the spotlight on Wednesday, with the release of the minutes from the January meeting, the last to have been chaired by Janet Yellen. The markets will be looking for hints regarding future rate policy, and any inkling of plans to raise interest rates more than three times in 2018 could trigger volatility in the currency markets as well as stock markets. Recent US numbers have been strong, and inflation indicators have been pointing upwards. This has raised concerns that the Fed may accelerate its pace of hikes, which triggered a sharp correction in global stock markets. The new chair of the Fed, Jerome Powell has tried to reassure the markets that the Fed is monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

Bitcoin, the most popular virtual currency, has shown sharp volatility in the past year, fluctuating between $900 and $19,000. These wild swings have drawn the attention of policymakers and lawmakers, as there are growing concerns that virtual currencies could have a negative economic impact. France and Germany want to put virtual currencies on the agenda at the next G-20 meeting, and there is bipartisan support in Congress to adopt new rules to regulate virtual currencies. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB’s responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions.

EUR/USD Fundamentals

Wednesday (February 21)

  • 3:00 French Flash Manufacturing PMI. Estimate 58.1. Actual 56.1
  • 3:00 French Flash Services PMI. Estimate 59.1. Actual 57.9
  • 3:30 German Flash Manufacturing PMI. Estimate 60.6. Actual 60.3
  • 4:00 German Flash Services PMI. Estimate 56.9. Actual 55.3
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 59.2. Actual 58.5
  • 4:00 Eurozone Flash Services PMI. Estimate 57.7. Actual 56.7
  • 9:45 US Flash Manufacturing PMI. Estimate 55.4
  • 9:45 US Flash Services PMI. Estimate 53.8
  • 10:00 US Existing Home Sales. Estimate 5.61M
  • 14:00 US FOMC Meeting Minutes

*All release times are GMT

*Key events are in bold

EUR/USD for Wednesday, February 21, 2018

EUR/USD for February 21 at 7:00 EDT

Open: 1.2337 High: 1.2345 Low: 1.2308 Close: 1.2318

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.2092 1.2200 1.2286 1.2357 1.2481 1.2569

EUR/USD inched lower in the Asian session and is choppy European trade

  • 1.2286 is providing support
  • 1.2357 is the next resistance line

Further levels in both directions:

  • Below: 1.2286, 1.2200 and 1.2092
  • Above: 1.2357, 1.2481, 1.2569 and 1.2660
  • Current range: 1.2286 to 1.2357

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged in the Wednesday session. Currently, short positions have a majority (58%), indicative of EUR/USD continuing to move to lower ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Latam Currencies Lower on Tuesday

Latin American currencies weakened on Tuesday as the U.S. dollar strengthened worldwide after hitting a three-year low last week.

Currencies from Brazil , Mexico and Colombia weakened between 0.3 percent and 0.9 percent. The Chilean peso was barely changed as profit-taking partially offset the global upswing in the U.S. currency.

Concerns that the United States could pursue a weaker dollar policy and by mounting worries about the U.S. budget deficit have driven the dollar sharply lower this year.



Some investors turned to bargain hunting on Tuesday, however, ahead of a series of U.S. debt auctions.

Stock markets in the region were mostly up, with Brazil’s benchmark Bovespa stock index leading gains even after policymakers ditched a plan to curb social security spending.

Investors saw the plan as key to boosting long-term economic growth, but had mostly given up on it after months of wrangling in Congress failed to advance the unpopular bill.

“Markets already expected that the pension reform would be buried,” said Ricardo Silva, a trader at Correparti brokerage.

Moody’s Investors Service on Tuesday said the government’s decision was credit negative and will “severely restrict” policymakers’ abilities to comply with budget rules. Shares in power utility Centrais Elétricas Brasileiras SA were the biggest gainers on the benchmark index as investors bet the government would turn its efforts to the privatization of the state-owned company.

via Kitco

Gold Slides on Concerns of Fed Tightening as Fed Minutes Loom

Gold has posted sharp losses in the Tuesday session. In North American trade, the spot price for an ounce of gold is $1330.89, down 1.16% on the day. On the release front, there are no US events on the schedule. On Wednesday, the Federal Reserve will publish the minutes of its January meeting. As well, the US will release Existing Home Sales.

Gold continues to fluctutate, and the base metal has surrendered much of last week’s gains. Investor fears of more rate hikes from the Fed sparked the turbulence in global stock markets, and gold has shown volatility, as gold prices are sensitive to moves (or expected moves) in interest rates. The Fed is currently projecting three rate hikes this year, but if inflation continues to move upwards, many analysts are expecting that the Fed could press the rate trigger four, or even five times in 2018. This sentiment is weighing on gold, and traders should expect more volatility on Wednesday, as the Fed may show some of its cards regarding future rate policy.

It’s been a busy start for Jerome Powell, who has just commenced his stint as chair of the Federal Reserve. Strong US data in recent weeks has raised speculation that the Fed may need to accelerate the pace of interest rate hikes in 2018.  Meanwhile, concern over higher inflation and more rate hikes sent the stock markets into a frenzy earlier in February. Powell sought to reassure the markets that the Fed was monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

 

XAU/USD Fundamentals

Tuesday (February 20)

  • There are no US events

Wednesday (February 21)

  • 9:45 US Flash Manufacturing PMI. Estimate 55.4
  • 9:45 US Flash Services PMI. Estimate 53.8

*All release times are GMT

*Key events are in bold

 

XAU/USD for Tuesday, February 20, 2018

XAU/USD February 20 at 12:30 EST

Open: 1346.65 High: 1348.41 Low: 1330.17 Close: 1330.89

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1260 1285 1307 1337 1375 1416
  • XAU/USD posted losses in the Asian and European sessions. The pair continues to lose ground in North American trade
  • 1307 is providing support
  • 1337 has switched to a resistance role following losses from XAU/USD on Tuesday
  • Current range: 1307 to 1337

Further levels in both directions:

  • Below: 1307, 1285 and 1260
  • Above: 1337, 1375, 1416 and 1433

OANDA’s Open Positions Ratio

XAU/USD ratio is showing slight movement towards short positions. Currently, short positions have a majority (60%), indicative of trader bias towards XAU/USD continuing to move lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.