Fundamental analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, USDCAD, XAUUSD, Brent, WTI for 02.11.2021
The U.S. dollar strengthened against major currencies on Tuesday ahead of the Fed meeting. Market participants expect the regulator to announce a possible two-rate hike next year, with the first increase coming in the first half of 2022. The press conference starts tomorrow at 21:30 (GMT+2).
EUR/USD continues to trade in a limited price range of 1.1580-1.1605. Published today the report on business activity in the manufacturing sector of the European Union and Germany, in particular, reflected the decline in both indicators in October. Tomorrow at 12:15 (GMT+2) ECB head Christine Lagarde is scheduled to speak. High inflation and consumer spending data are consistent with the situation when the regulator should start cutting QE. Market participants keep hoping that the ECB will be bolder and Lagarde will hint at a timeline for tapering off quantitative easing.
GBP/USD has been down about 40 pips at the time of writing on Tuesday. The instrument is testing the strong support level of 1.3620, the breakdown of which will contribute to the decline of the instrument in the range of 1.3530-1.3470. Tomorrow the composite PMI will be published, as well as the index of business activity in the British service sector. The Bank of England will hold a meeting on Thursday.
AUD/USD and NZD/USD lost heavily amid investors' risk aversion. The RBA meeting was held today, where the regulator reiterated its preference for cautious monetary policy. The central bank will continue to buy assets at a rate of $4 bln a week until February 2022, after which the QE parameters may be reviewed. The labor market and financial stability reports will be released today in New Zealand, and the Reserve Bank of New Zealand Governor will speak at the opening of the new trading session. The USD/CAD is consolidating near the resistance level of 1.2400. The pair is rising thanks to the strong dollar, but the Canadian economy is close to a full recovery and oil prices remain high, so Investizo expects the instrument to resume falling in the short term.
Brent and WTI lost little today on expectations of an increase in inventories of major oil products in the U.S. At the same time, the hydrocarbons market retains high upside potential. OPEC+ members did not reach full production quotas in October. India, Japan, and the US are asking to increase production, while China has increased refinery utilization to avoid diesel shortages. Thus, the gap between supply and demand is widening. The next meeting of OPEC+ will be held on Thursday.
Gold is showing a minimal decline today. Interest in the XAU/USD is limited by the strong dollar. Further dynamics of the trading instrument depend on the Fed plans, which will be announced tomorrow.