British pound rises on renewed hopes of a Brexit breakthrough
The US dollar was little changed as the market reacted to the minutes of the previous Fed interest rate decision. The minutes showed that the central bank was concerned about the state of the economy now that congress had failed to offer more stimulus. As a result, they deliberated on their other options to support the economy. Some members noted that in future minutes, it will be necessary to assess how the asset -purchase program could best support the Fed’s dual mandate objectives. The members agreed to hold rates near zero until the economy reaches peak employment and inflation moves above 2%. They also agreed to continue with the asset purchases of ~$120 billion per month.
The British pound rose slightly as investors reacted to news that the UK and the EU were moving towards a deal. In public, officials from the two sides have committed to abandon the talks if they don’t reach an agreement by October 15. Yet, in private, things are better than expected, according to Bloomberg. The report said that the two sides are trying to reach an accord on their future relationship and on other issues like transport and law enforcement. The sterling is also rising after a report by RICS showed that the house price balance rose to 61% in September from 44%.
The price of crude oil was little changed in overnight trading as the market reacted to US inventories data. Data from the Energy Information Administration (EIA) showed that inventories rose by more than 501,000 barrels in the previous week. That was higher than the consensus estimate of a 294k increase. The US imported more than 1.46 million barrels of oil per day in the previous week. Later today, we will receive the Swiss unemployment rate, German export and import data, and the Canadian building permits data.
The EUR/USD pair is trading at 1.1765, which is in the same range it was yesterday. On the hourly chart, the price is slightly above the 25-day exponential moving averages. The price has formed a symmetrical triangle pattern that is shown in green. The Relative Strength Index (RSI) is at the neutral level of 50 while the price is above the dots of the Parabolic SAR. Therefore, the price is likely to remain in the current range today.
The AUD/NZD pair rose to an intraday high of 1.0887 in overnight trading. That was the highest it has been since September, 17. On the four-hour chart, the price is above the 25-day exponential moving averages. The RSI has also moved close to the overbought level of 70. Also, the price is above the important resistance level of 1.0848. Therefore, the price is likely to continue rising as bulls aim for the next resistance at 1.0900.
The NZD/USD pair declined to an intraday low of 0.6543. On the four-hour chart, the price is below the 15-day and 25-day exponential moving averages. The price is also below the neutral line of the MACD indicator. The price also seems to be forming an inverted cup and handle pattern. Therefore, there is a likelihood that it will continue falling as bears aim for moves below 0.6500.