EURUSD nosedived, post hawkish Federal Open Market Committee statements. As expected by Market Analysts, Monetary Policy makers at the FOMC Meeting on Wednesday, agreed to keep short-term benchmark Interest Rates for the second consecutive meeting, at between 1.00% and 1.25%, with the announcement of plans to normalize the budget by October.
On Thursday, despite recent declines, prices still have to break and hold below 1.1860 and 1.1835 support levels to confirm continuation of the decline. A break of near resistance levels at 1.1895 would affect recent bearish trends, causing a possible sideways movement. Furthermore, a negative divergence is noticed. A break of 1.1860 will confirm this divergence and may cause further declines.
Technical reading of the GBPUSD shows that prices are consolidating after a strong rally Wednesday. With no signs of a general bullish trend change, only breaking support levels at 1.3467 would allow prices to retreat further and test 1.3380 levels. At the same time, a breach of near resistance at 1.3507 would allow a possible bullish sentiment to test the 1.3530 levels.
USDJPY: The Dollar strengthened against the Yen Thursday, for the fifth session in a row. The Japanese Yen tried to show some strength following the Bank of Japan’s Monetary Policy Meeting, where policymakers decided to keep the policy unchanged, and hold the benchmark Interest Rate at -0.1%, far from the 2% target.
For the USDJPY pair, the technical reading is positive and the Bulls are dominating the sentiments. Price action is expected to rally upwards to 112.64.
The rebound of the USDCHF pair should reinforce previous bullish sentiments. The success of this pair in breaching near resistance levels at 0.9717 will enhance optimism and push the price test to 0.9750. However, there might be a possible temporary reversal if the price falls below the 0.9700 resistance.
XAUUSD | GOLD SPOT
Gold prices declined sharply following the hawkish FED statement which indicated a rate hike this year. The selling pressure on the XAUUSD commodity dollar pair reinforces a bearish trend. A break below the support levels at 1295 will consolidate the pair and subsequently drag it down to 1285 levels. A break above will take the yellow metal up to 1300, temporarily easing selling pressure.
West Texas Crude prices are up Thursday, trading at 50.40. Technical analysis show prices had a strong rally. With no signs of a general bullish trend, a break at the 49.75 support level would allow prices to further retreat to test 49.30 levels. On the other hand, a breach of near resistance levels at 50.50 would encourage the Bulls, therefore pushing prices up to 50.70.