It’s ok to be wrong; it’s unforgivable to stay wrong.
USD
EUR/USD
The shared currency remained under pressure at $1.1604 after a European Central Bank survey showed that the Eurozone banks tightened access to mortgages in the last three months and expected to continue doing so in the final quarter of 2021.
GBP/USD
The Pound Sterling initially surged to a high of $1.3830 on Tuesday before ceding most of its gains to $1.3760 on concerns around the potential of a tax hike in the U.K. budget announcement today.
USD/JPY
The Japanese yen is on a soft tone at 113.99 versus the U.S dollar as the market is bracing for a dovish monetary policy statement by the Bank of Japan later this week, with markets betting on a no rate hike in the foreseeable future.
AUD/USD
The Aussie dollar extended gains to $0.7526 after core consumer prices in Australia rose faster than expected over the last quarter, rising 2.1% in the third quarter, compared to an expected 1.8% rise.
USD/CAD
The Loonie lost its steam at 1.2389 against the greenback as traders got nervous the Bank of Canada(BOC) would temper investor expectation at its policy announcement later in the day. The BOC could become the first central bank from a G7 country to end stimulus from its pandemic-era bond-buying program amid hot inflation and a recovering job market.
USD/ZAR
The South African rand weakened to 14.83 per U.S dollar as precious metals prices fell and power utility Eskom extended scheduled power cuts because of a shortage of generation capacity.
USD/MUR
The dollar-rupee idled at 43.05(selling) on the domestic market.
16:30 - USD - Core Durable Goods Orders (MoM) (Sep)
1800 - CAD - BoC Interest Rate Decision
18:00 - CAD - BoC Monetary Policy report
19:00 - CAD - BoC Press Conference
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.
