Tue. Oct 26th, 2021

EURUSD fell as expected by the ECB

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The euro has been on the water for at least 12 weeks while traders await the ECB meeting. The central bank is likely to emphasize its recent shift towards a less aggressive strategy.

By tolerating inflation levels above 2% instead of “closing and lowering it,” policymakers give room for what could be a transient price jump. Sounds familiar from the other side of the Atlantic, right? The difference, however, is that the US dollar has already had a reduced price.

The divergence of policies can play against the euro in the medium term. The pair is above the key support of 1.1710.

Lifting resistance a 1.1970 it is the first step towards recovery.

AUDUSD weakens in the middle of blockages

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The Australian dollar softens when a new blockade in Melbourne threatens recovery. Along with Sydney, restrictions on the country’s two economic centers would cost more than $ 1 billion a week.

Growth may face its first contraction since June 2020, which could dampen hopes of a monetary tightening. The RBA may think twice before turning off the tap for fear of detailing the fragile bounce.

The prospect of delaying the first rise in interest rates could make the Australian vulnerable to a deeper correction.

The couple slides towards 0.7270, a resistance turned into support last November. 0.7600 is the closest resistance.

The SPX 500 rises to profit expectations

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The S&P rises 500 centimeters as market sentiment remains optimistic. Fed Chairman Jerome Powell’s assurance that inflation will moderate is the backbone of the rally.

They are not missing record highs if the cheap money flow is intact.

Meanwhile, the second quarter earnings season has started and markets want to justify high valuations. As long as profits live up to expectations, investors would be willing to pay for fear of getting lost.

The upward momentum could continue and those crying for bubbles may stay out of the way for a while. 4500 would be the next goal and 4245 the first support in case of setback.

XAUUSD bounces on Fed Avenue promise

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Bullion continues to recover as traders buy the Fed’s commitment to maintain its accommodative policy for a while.

During his hearing before the Senate Banking Committee, Fed Chairman Jerome Powell said the price increase comes mainly from sectors related to the reopening of the pandemic. Therefore, there is no rush to lift the stimulus despite excess inflation.

The central bank’s obedient commitment has caused U.S. Treasury yields to fall to a one-week low, which has increased the attractiveness of the no-yield metal.

Gold has bounced back support to 1760 about 61.8% Fibonacci. The psychological level of 1900 would be the next goal.

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