Recently, European Central Bank (ECB) President Christine Lagarde indicated that the ECB may take key interest rates out of negative territory and may raise interest rates further by the end of September.
1. Forex Market Insight
The dollar index touched a more than 15-month high of 94.90 yesterday. Although the Fed reiterated last week its view that the current spike in inflation will be short-lived, many investors said that longer-than-expected inflation could force the Fed to raise interest rates.
The U.S. Department of Labor said the Consumer Price Index (CPI) rose by 0.9% in October and 6.2% year-over-year, following a 0.4% increase in September from a year earlier. The “quite alarming” inflation data, including the sharp rise in house prices, suggests that high consumer prices “are unlikely to prove temporary.” Against this background, the euro fell sharply on the back of the U.S. index.
(EUR/USD 1-hour chart)
Today, pay attention to the 1.1583 -line. If the euro runs steadily below the 1.1583-line, keep the trend of bearish thinking, and focus on the support of the 1.1401-line below. If the strength of the euro breaks through the 1.1583 line, it will open up further upside space. At that time, pay attention to 1.1622 and 1.1622. 1.1666 Two positions of suppression strength.
GBP Intraday Trend Analysis
The pound was down by 1.12% against the dollar in late trading at $1.3405, after falling below Friday’s low of $1.3425. The pound was hit hard by the Bank of England’s unexpected decision to keep interest rates unchanged.
(GBP/USD 1-hour chart)
The pound today is mainly focused on the 1.3522-line. If the pound runs below the 1.3522-line, then pay attention to the support at the 1.3302 and 1.3186 positions in turn. If the pound breaks through the 1.3522-line, then pay attention to the suppression at the 1.3574 and 1.3669 positions.
2. Precious Metals Market Insight
Gold climbed to its highest point in nearly five months yesterday. The spot gold rose by 2% to $1,868.55 an ounce, its highest level since June.
Data showed that the U.S. consumer prices surged last month, boosting gold’s appeal as an inflation hedge. But with the dollar surging, gold prices narrowed late in the session, falling back to $1849.6 per ounce.
(Gold 1-hour chart)
Today gold pays attention to the 1869-line today. If the price of gold runs stably below the 1869-line, then pay attention to the support of the 1844 and 1831 positions. If the price of gold breaks through the 1869-line, it will open up further upside space. At that time, pay attention to the suppressive strength of each position at 1880 and 1887.
3. Commodities Market Insight
WTI Crude Oil
Oil prices fell yesterday, with U.S. oil down by nearly 4%, the biggest drop in a week. The U.S. government report showed an unexpected increase in domestic crude inventories and a rising dollar weighed on the prices of dollar-denominated commodities. Plus, the market expectations for the Biden administration to release crude reserves were raised, dragging down the oil prices further.
(Crude oil 1-hour chart)
Today, oil prices are paying attention to the 78.92-line. If oil prices run above the 78.92-line, they will focus on the suppression of the 81.07 and 82.83 positions in turn. If the oil price drops below 78.92, it will open up a further downward space. At that time, focus on the 76.89-line of support.
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