All eyes on the Federal Reserve!

The U.S. dollar was seen trading weaker on Tuesday. The weakness in the greenback comes ahead of today's Fed meeting. However, the USD was seen managing to recover some of the losses later in the day.

Economic data on the day showed that the German Ifo business climate fell to 101.0. This missed estimates of 101.8 and was down from 102.0 previously.

Canada's manufacturing sales were down 0.1% on the month missing the median forecasts and slowed from the 0.2% increase the month before. In the U.S. the building permits rose modestly to 1.33 million which beat the forecasts while housing starts rose 1.26 million on the month.

The UK's inflation report for November is due today. Econplans for the next year.omists polled forecast that inflation might have eased to 2.3% on an annualized basis in November. This marks a somewhat slower pace of increase in inflation compared to the 2.4% that was registered in October. Core inflation is expected to also ease to 1.8%, down from 1.9% previously.

The NY trading session will see Canada's inflation data coming out. Headline inflation is forecast to fall 0.1% after rising 0.3% on the month previously. The annualized inflation is expected to remain at 2.1%.

Later in the day, the housing data continues with the release of the existing home sales report. Existing home sales are forecast to rise just 5.2 million on the month down from 5.22 million previously.

The much-awaited Fed meeting will be underway as the FOMC will be hiking interest rates today to 2.50%. The central bank will also be releasing its economic projections and rate hike plans for the next year.

Following the Fed meeting, later in the overnight session, New Zealand will be releasing its quarterly GDP data. GDP is forecast to rise 0.6% in the third quarter, marking a slower pace of increase.

 

EURUSD intraday analysis

EURUSD (1.1379): The EURUSD currency pair managed to break out from the falling trend line. A brief decline back to the breakout level saw price action closing with a doji followed by a bullish upside breakout. The price action indicates near-term upside as the EURUSD could be seen testing the resistance level at 1.1435 in the near term. A breakout above 1.14350 is required for price action to continue the upside and potentially shift the trend. Alternately, failure to break the resistance level could allow the EURUSD to maintain its sideways range.

 

GBPUSD intraday analysis

GBPUSD (1.2653): The GBPUSD currency pair was seen edging higher on Tuesday. Price action was seen retesting the breached support level at 1.2683 where resistance is currently formed. Failure to breakout above this level could keep price action subdued. We expect the GBPUSD to maintain the range within 1.2683 and the lows of 1.2491 where support looks to have been formed. There is scope for an upside breakout given the ascending triangle pattern being formed. This would give a minimum upside target toward 1.2806.

 

XAUUSD intraday analysis

XAUUSD (1250.91): Gold prices maintained the strong bullish momentum. Price action has managed to clear the previous highs near 1248.00. This could potentially signal further upside. The next main target for gold comes in at the 1280 level. However, for further gains to be established, gold needs to form support at the 1248 region. There is also a risk that the current upside momentum could falter. In this case, we expect gold prices to potentially risk posting a correction toward the 1227 - 1228 level of support.