Markets muted to FOMC as inflation puzzles officials
|The FOMC meeting minutes released late yesterday showed a mixed outlook as policy makers were divided on interest rate hikes. While some officials preferred for rates to be hiked, others preferred to wait for more evidence.
Besides the FOMC minutes, Fed speak over the day included Evans who questioned whether more accommodative policy was required to boost inflation while on the other hand, George said that the Fed should continue with its gradual rate hikes.
On the economic front, data was relatively quiet. Looking ahead, the US producer prices index data will be released today. Estimates point to a 0.4% increase on the headline PPI while core PPI is expected to rise 0.2% on the month. ECB President Mario Draghi will be speaking today followed by FOMC members Powell and Brainard.
EURUSD intraday analysis
EURUSD (1.1873): The euro maintained bullish gains for a fourth consecutive day as price breached the resistance level of 1.1822 - 1.1843. Clearing this resistance will now see further gains in the currency pair as it targets the potential unfilled gap at 1.1948. However, establishing support near the newly breached resistance level will add more validity to the upside. Despite the anticipated move towards 1.1948 EURUSD longer term bias remains to the downside. Thus, a potential reversal near the above target could signal a possible move towards 1.1822 - 1.1843 region followed be a further decline to the previous support at 1.1720.
USDJPY intraday analysis
USDJPY (112.36): The USDJPY continues to remain trading within the range of 113.00 and 111.74. This consolidation is seen as USDJPY attempts to break past the longer term falling trend line. With the strongconsolidation posted here, the bias is building to the downside. Support at 111.74 will be the initial target followed by a decline to 111.00. However, in the medium term, USDJPY is seen maintaining the sideways price action as a result. Only a breakout from the range will establish the direction and potentially signal further gains or declines in prices.
XAUUSD intraday analysis
XAUUSD (1295.01): Gold prices struggled near the resistance level of 1290 - 1288 region but was seen attempting to clear this level. Any upside move in prices is likely to see a reversal back to the cleared resistance level where support could be formed. The upside bias will keep gold prices potentially targeting the 1320 - 1324 region of resistance as the next target with the said support level to the downside. In the event of a break down below the 1290 - 1288 region, gold prices could remain mixed with a potential to post further declines down to 1275 - 1273 region.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.