Metals continued their upward movement on Wednesday with increasing tensions between Russia and Ukraine.
The dollar, which rallied following Trump's victory, declined due to profit-taking but has since rebounded from the 106 level and is rising again. On the UK side, today’s upcoming CPI data will be crucial in determining the direction of GBP/USD. Meanwhile, in the US, data remains subdued as the week progresses.
Time | Cur. | Event | Forecast | Previous |
07:00 | GBP | CPI (YoY) (Oct) | 2.2% | 1.7% |
07:00 | GBP | CPI (MoM) (Oct) | 0.0% | |
07:00 | GBP | PPI Input (MoM) (Oct) | 0.5% | -1.0% |
13:00 | EUR | ECB President Lagarde Speaks | ||
15:30 | US | Crude Oil Inventories | 2.089M |
The EUR/USD pair has struggled to gain momentum, trading below the $1.06 mark and at risk of further declines. The strength of the US dollar has been the dominant factor in foreign exchange markets in recent weeks, outweighing geopolitical concerns. This has put downward pressure on all major currency pairs, driven by rising inflation fears following Trump's victory and the Federal Reserve's indication that it will slow its rate cuts.
Euro faces challenges from political instability in Europe, weakening economic data from the Eurozone, and potential escalations in the Russia-Ukraine conflict. While US data is light this week, global PMIs on Friday could increase volatility.
The dollar index maintained its recent drop, settling around 106.2 on Wednesday, as the initial surge in demand for safe-haven currencies, triggered by the intensifying Russia-Ukraine conflict, began to fade.
EUR/USD resistance levels are 1.0600, 1.0650, and 1.0700, with support at 1.0550, 1.0500, and 1.0450.
R1: 1.0600 | S1: 1.0550 |
R2: 1.0650 | S2: 1.0500 |
R3: 1.0700 | S3: 1.0450 |
The Japanese yen weakened once again toward 155 per dollar, erasing some of its recent gains as verbal interventions from Japanese officials seemed to lose their effectiveness. Market attention is now focused on the 160 level, which could trigger additional government action, like the measures taken in July. On the economic side, data revealed that Japanese exports grew by 3.1% in October, recovering from a 1.7% decline in September and surpassing the expected 2.2% increase. Imports also rose by 0.4%, defying predictions of a 0.4% decrease. Meanwhile, Bank of Japan Governor Kazuo Ueda stated on Monday that any future interest rate hikes would be gradual, depending on economic conditions, though he did not specify when these hikes might happen.
In the USD/JPY pair, the first support level is at 153.80. If this level is broken, the next support levels to monitor are 152.50 and 151.80. On the upside, resistance levels are at 156.10, 157.50, and 158.00, respectively.
R1: 156.10 | S1: 153.80 |
R2: 157.50 | S2: 152.50 |
R3: 158.00 | S3: 151.80 |
Gold continued its upward trend, reaching around $2,640 per ounce, marking the third day of gains. The rise was driven by growing demand for safe-haven assets amid escalating tensions between Russia and Ukraine. Reports revealed that Ukraine conducted its first missile strike on a Russian border area using Western-supplied weapons, while President Putin broadened Russia's nuclear policy to allow a nuclear response to conventional attacks. Gold prices recovered approximately 38% of the losses from the first half of November, which were caused by a strong US dollar and diminished expectations of Federal Reserve rate cuts due to solid economic data. Despite this, most investors still anticipate a 25 basis point rate cut from the Fed in December, although the likelihood has decreased slightly to 58% from the previous 62%.
The first support level for gold is at $2,590, followed by $2,575 and $2,545 while $2,640 serves as a key resistance level, with $2,665 and $2,690 as the next levels to monitor if this resistance is surpassed.
R1: 2635 | S1: 2590 |
R2: 2665 | S2: 2575 |
R3: 2690 | S3: 2545 |
GBP/USD fluctuated just below the 1.2700 mark, as traders of the pair braced for a significant release of UK economic data, highlighted by the Consumer Price Index (CPI) inflation figures for October. With US economic data taking a backseat on the same day, attention in the pair shifted to the UK reports, which could influence the Bank of England's (BoE) stance on potential rate cuts for the remainder of the year. In its Monetary Policy Report released on Tuesday, the BoE adopted a cautious tone, stating that interest rates remain "moderately restrictive." As a result, market participants are now pricing in less than a 20% probability of an additional rate cut by the BoE this year.
Key support levels for the GBP/USD pair are at 1.2595, 1.2520, and 1.2475. On the upside, resistance levels to watch are at 1.2700, 1.2740, and 1.2820.
R1: 1.2700 | S1: 1.2595 |
R2: 1.2740 | S2: 1.2520 |
R3: 1.2820 | S3: 1.2475 |
As of Wednesday morning, silver is trading at around 31.00 USD per ounce. Silver markets are highly responsive to geopolitical tensions, with recent developments driving increased volatility. Russia’s changes to its nuclear policy, allowing for a potential nuclear response to conventional attacks, have raised fears of escalation. Additionally, Ukraine’s use of US-supplied ballistic missiles has further intensified safe-haven demand, pushing silver prices to $31.56 as investors seek protection from rising risks. Silver has rebounded from support levels as investors turn to both metals amid growing geopolitical uncertainties.
On the upside, the critical resistance levels to watch are 31.60, 32.10, and 32.50. On the downside, 30.80 remains a significant first support level. If this level is breached, the next support levels to monitor are 30.20 and 29.80, respectively.
R1: 31.60 | S1: 30.80 |
R2: 32.50 | S2: 30.20 |
R3: 32.80 | S3: 29.80 |
The euro hovered near 1.05, supported by expectations of a 25-basis-point rate cut from the ECB, while the yen slipped below 155.5 per dollar, pressured by U.S. tariff threats but strengthened by the BOJ’s hawkish stance.
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