FxWirePro: Currency Market Daily Outlook

US dollar was trading weak and lost more than 50 pips yesterday ahead of Fed monetary policy meeting. According to the CME Fed watch tool, the probability of keeping rates unchanged at 45.8% from 37.7% yesterday and 25bps cut declined from 62.3 to 54.40. US dollar index hits a low of 98.19 and is currently trading around 98.28.

The precious metal is consolidating in a narrow range between $1480 and $1528 for the past two weeks. Any major movement can be seen only after the Fed policy. The major support for the day is around $1485 and any violation below targets $1475/$1469. It is currently trading around $1503.

The Brent crude oil prices lost more than 8% on hopes of recovery in Saudi output sooner than expected. It hits low of $63.52 and is currently trading around $64.57.  

US 10 year bond yield declined more than 5% after a jump of more than 30%.  Any hawkish comment from Fed chairman will push it further higher. It is currently trading at 1.800%. The yield curve inversion between US 10 year and 2-year has gone and spread narrowed slightly from 9 bps to 8 bps.

Daily Technical:

EURUSD:

Major trend reversal level- 1.1125

Near term support- 1.100/1.0930

Near term resistance – 1.1125/1.11750

USDJPY:

Major trend reversal level- 108.35

Near term support- 107.20/106.60

Near term resistance – 108.35/109.30

USDCHF

Major trend reversal level- 0.9978

Near term support- 0.9850/0.9770

Near term resistance – 0.9978/1.0030

USDCAD

Major trend reversal level- 1.3380

Near term support- 1.3300/1.3380

Near term resistance – 1.3180/1.3135

Gold

Major trend reversal level- $1480

Near term support- $1480/$1460

Near term resistance – $1525/$1555

WTI Crude 

Major trend reversal level- $63.50

Near term support- $58.10/$56.08

Near term resistance – $60.50/$63.50

Major Economic events for the day

Fed policy meeting - Wednesday (6 PM GMT)

Canadian CPI - Wednesday (12:30 PM GMT)