Forex Today: The US election will drive the global sentiment

The unwinding of a big chunk of the “Trump trade” hurt the US Dollar at the beginning of the week amidst marginal developments in US yields and rising caution ahead of Tuesday’s US election and Thursday’s FOMC gathering.

Here is what you need to know on Tuesday, November 5:

The US Dollar Index (DXY) broke below the 104.00 support and reached new two-week lows amidst rising prudence ahead of the US election on Tuesday. Next on tap on the US docket will be the ISM Services PMI, the final S&P Global Services PMI, and the API’s weekly report on US crude oil inventories.

EUR/USD advanced further north of the 1.0900 barrier, although that initial impulse fizzled out as the NA session drew to a close on Monday. The ECB’s Lagarde and Schnabel are due to speak.

GBP/USD added to Friday’s uptick on the back of the weaker Greenback, although spot faltered just ahead of the key 1.3000 milestone. The BRC Retail Sales Monitor is due seconded by New Car Sales, and the final S&P Global Services PMI.

USD/JPY traded with marked losses, coming all the way down to retest the key 200-day SMA in the mid-151.00s. Next of note on the Japanese calendar will be the release of the BoJ Minutes and the final Jibun Bank Services PMI on October 6.

AUD/USD climbed to multi-day peaks and reclaimed the 0.6600 barrier and beyond, coming in just short of the key 200-day SMA. The RBA’s interest rate decision will take centre stage in Oz.

In quite a promising start to the week, prices of WTI rose past the $71.00 mark per barrel, or two-week highs, following the OPEC+’s decision to postpone its planned oil output increases in December.

Prices of Gold rose modestly and remained close to the $2,750 mark per ounce troy following the offered bias in the US Dollar as well as the absence of direction in US yields. Same performance saw Silver prices reverse three daily pullbacks in a row and approach the key $33.00 mark per ounce.