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Forex Today: Majors stay in familiar ranges, eyes on US data, BoC policy decisions

Here is what you need to know on Wednesday, October 27:

The dollar gathered strength against its rivals for the second straight day on Tuesday but the action in major currency pairs remains subdued as investors gear up for key events and data releases. On Wednesday, September Durable Goods Orders and Trade Balance data will be featured in the US economic docket. The Bank of Canada (BoC) will announce its monetary policy decisions at 1400 GMT. 

Durable Goods Orders Preview: Five scenarios to trade the event with EUR/USD.

Risk mood: The S&P 500 and the Dow Jones Industrial Average indexes hit new all-time highs on Tuesday but erased a large portion of daily gains before closing modestly higher. The Shanghai Composite is down nearly 1% on Wednesday and the Nikkei 225 is falling 0.25%. US stock index futures trade flat in the early European session. After the closing bell, Google Alphabet reported better-than-expected earnings for the third quarter.

Meanwhile, the 10-year US Treasury bond yield edged lower on Tuesday and seems to have gone into a consolidation phase between 1.6% and 1.65%.

Macro data: On Tuesday, the data from the US showed that New Home Sales surged by 14% in September, compared to the market expectation of 1.5%. Additionally, the Conference Board's Consumer Confidence improved to 113.8 in October from 108.3 in September.

On Wednesday, the Reserve Bank of Australia (RBA) reported that the Trimmed Mean CPI climbed to 2.1% on a yearly basis in the third quarter from 1.6% in the second quarter. This reading surpassed analysts' estimate of 1.8%.

Finally, the GfK Consumer Confidence Index in Germany rose to 0.9 in November from 0.4 in October and beat the market consensus of -0.5 by a wide margin.

EUR/USD continues to trade in a very narrow band around 1.1600 handle ahead of the European Central Bank's highly-anticipated policy meeting. 

GBP/USD managed to gain traction on the back of the upbeat CBI retail trade figures on Tuesday but returned below 1.3800 with the dollar preserving its strength.

USD/CAD is staying relatively quiet around 1.2400 early Wednesday. The BoC is widely expected to leave its policy rate unchanged at 0.25% but a reduction in asset purchases could help the CAD stay resilient against its American counterpart.

Bank of Canada Rate Decision Preview: Inflation prospects headline policy review.

AUD/USD advanced beyond 0.7500 after the quarterly inflation data and closes in on the multi-month highs it set at 0.7548 last week. 

Gold bulls failed to defend $1,800 on Tuesday and XAU/USD lost nearly 1%. The pair is moving sideways around $1,790 on Wednesday while waiting for the next catalyst.

Cryptocurrencies: Bitcoin met resistance near $64,000 on Tuesday and lost more than 4%. Currently, BTC is trading near $60,000 and additional losses could be witnessed if this support fails. Ethereum preserves its bullish momentum eyes new all-time highs near $4,400.

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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