USD GAINS SUPPORTS FOLLOWING JEROME POWELL’S SPEECH

The EUR/USD price is falling today after a confident increase during the last couple of trading sessions. The pressure on the pair was provided by the hawkish speech of the next head of the Fed, Jerome Powell, in which he stressed that he will maintain his predecessor, Janet Yellen’s, course of action. He plans to continue tightening monetary policy settings and to shrink the balance sheet gradually. Hawkish rhetoric by the new chairman of the central bank supported the US dollar. Investors are now waiting for the preliminary report on US GDP growth which will be released tomorrow. The greenback got further support from the stronger than expected data from the S&P/Case-Shiller house price index in the US which in September increased to 6.2% versus the 6.0% expected.

The American light sweet crude oil benchmark WTI is falling ahead of the OPEC meeting in Vienna that starts tomorrow. The continuation of production cuts in OPEC and some other major oil producing countries like Russia will be the focus of discussions. We should note that oil quotes have shown a confident increase in anticipation of maintaining the current agreement and we may start to see profit taking after the release of the decision.

The British pound is under pressure from a strong US dollar and geopolitical headwinds arising from the border issue between Northern Ireland and the Republic of Ireland due to a political crisis in the Irish government.

Today traders should also pay attention to retail sales data from Japan due to be released at 23:50 GMT, but it is likely to have a limited impact on the course of trading.

EUR/USD

The EUR/USD was not able to gain a foothold above the resistance at 1.1924 and within the current descending correction may return to 1.1825 and the inclined support line. On the other hand, we do not exclude growth resuming, and fixing above 1.1925 may become a trigger for further price increases with potential targets at 1.2000 and 1.2200.  

USD/WTI

The USD/WTI quotes keep falling along the local inclined resistance line, and continuation of the current descending impulse may result in the price hitting 57.00. Breaking through the inclined resistance and the SMA100 on the 15-minute chart may result in the change of the local bearish trend to positive with the potential goal at 59.00. Volatility is likely to increase during the next couple sessions due to the OPEC meeting.

GBP/USD

The GBP/USD has broken through the lower boundary of the rising channel and fixing the price beyond its limits may become the stimulus for further price declines to 1.3250 and 1.3150. The RSI index is in the oversold zone, which points to a possible price rebound to 1.3300 or above it.