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USD
EUR/USD
The Shared currency grinded higher to $1.1658 ahead of an important week comprising the European Central Bank monetary policy meeting, German inflation, U.S. Q3 GDP, followed by Friday's eurozone inflation data.
GBP/USD
The Cable struggled to gain traction at $1.3781 despite news U.K.'s Finance Minister Rishi Sunak drawing up plans to push the minimum wage to £10 an hour by the next General Election and an additional £6 billion budget to its National Health Service.
USD/JPY
The Japanese yen bolstered to 113.64 against the U.S. dollar following Fed's President Jerome Powell warned of persistent higher inflation but sounded soft on the pace of U.S. rate hikes.
AUD/USD
The Aussie dollar was flat at 0.7486, unable to hold on to risk-on gains last week after the Reserve Bank of Australia defended its yield curve control target and asserted there will be no rate hikes before 2023.
USD/CAD
The Loonie bounced back to 1.2348 after Retail Sales in Canada rose by 2.1% on a monthly basis in August from July.
USD/ZAR
South Africa's rand dived to 14.79 against the U.S. dollar, losing its opening momentum on Friday, as the euphoria around Chinese developer Evergrande's last-minute interest payment gave way to caution.
USD/MUR
The dollar-rupee steadied at 43.05(selling) on the local market.
12:00 - EUR - German IFO Business Climate Index (Oct)
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.
