News & Data:
It was rather quiet overnight, with no important data releases. The market is still digesting the FOMC minutes, which have been released in yesterday’s NY session. While there is not really anything new in the minutes, traders have been surprised by the fact that some FOMC members still see a June rate hike as possible. Fed’s Dudley was speaking yesterday and made some similar remarks, which helped the USD catch a bid.
In the commodities market, precious metals are under renewed pressure, while oil is recovering after a big move down yesterday. Gold consolidated around $1202 for a while, which was the weekly open level, but eventually broke lower. Silver gave the first signs that metals are likely to head lower, as it broke sub-$16.60 support and eventually extended losses towards $16.35. Next significant support seen at $16.05 and at $1178 in Gold.
In the FX market, not much has changed since the NY close and overnight ranges are tight. EUR/USD traders are now focusing on the 1.0700/10 support area, and if we see a clear break below, there is not much in the way for a 1.0460 re-test. Selling rallies the preferred strategy for the pair, with 1.0830 the key intraday resistance level. Similar price action in GBP/USD. The pair again failed to break above 1.4980 and sharply reversed from there, which suggests bears are clearly in control and downside momentum could increase within the next few sessions. Initial support seen at 1.4800/05 and then 1.4740.