US dollar falls as traders predict gridlock in Washington
The Australian dollar is up slightly against the US dollar as traders react to the country’s export and import data. According to the bureau of statistics, Australia exports bounced back in September even as the country dealt with its second wave. In total, exports rose by 4% after slipping 4% in the previous month. However, imports declined by 6%, which led to the trade surplus bouncing back from A$4.3 billion in August to more than A$5.6 billion in September. The numbers came two days after the country’s central bank slashed interest rates and announced several easing measures. Yesterday, we also received impressive construction and services PMI numbers.
The US dollar is down slightly against key peers as traders continue focusing on the American election results. With only a few states left to complete their tallying, most analysts have started pricing-in a Joe Biden presidency. At the same time, with the senate remaining in Republican hands, they are pricing-in gridlock at least in the next two years. Later today, we will receive the interest rate decision by the Federal Reserve. Analysts expect that the bank will leave the interest rate unchanged and pledge to provide more support to the economy as the number of Covid cases rises.
The British pound is little changed against the dollar as traders wait for the interest rate decision from the Bank of England (BOE). Like with the Fed, most analysts believe that the bank will leave rates and the target for quantitative easing unchanged. Also, they are expecting a commitment to further easing as the UK economy goes through another lockdown. Other important events to watch today will be the Swedish GDP data, the US jobless claims numbers, and the Norwegian central bank decision.
The EUR/USD has made strong gains after it fell to a low of 1.1600 yesterday. It is now trading at 1.1728, which is in the same range it was during the American session. On the hourly chart, the pair has moved above the 25-day and 15-day moving averages. It is also slightly below the 50% Fibonacci retracement level while its volatility has started to fall. It has also formed a bullish flag pattern, which means that it could break-out lower today.
The AUD/USD pair is up slightly today as traders react to Australia’s trade numbers. It is trading at 0.7172, which is a few pips below yesterday’s high of 0.7222. On the four-hour chart, the price is slightly above the variable index dynamic average, in a sign that bulls are relatively in control. The signal and main line of the MACD are also above the neutral line. It is also between the 38.2% and 50% Fibonacci retracement. Therefore, the pair will likely continue rising as bulls aim for the next resistance at 0.7180.
The XBR/USD is trading at 40.75, which is slightly below the resistance level at 41.38. On the four-hour chart, the price is along the middle line of the Bollinger bands. It is also along the 61.8% Fibonacci retracement level while the Relative Strength Index (RSI) has moved slightly below the overbought level. Still, the price could continue rising as bulls react to the possibility of a Biden presidency.