The broader USD backdrop remains softer than a week ago, however, as markets have reduced expectations of the Fed’s rate hike next month. Gold has returned to the $4,400 area, with several opposing forces currently determining the price action. EURUSD has edged lower towards 1.15700. Bitcoin remains close to the lower end of its recent trading range, around $64,000, with neither side yet establishing a convincing directional move.
- The USD will require a more hawkish background from the Fed minutes for the sustained recovery.
- XAUUSD is trading around $4,397, effectively testing whether $4,400 can become support rather than resistance.
- Today’s decline in EURUSD looks more like a correction following the euro’s recent advance than a meaningful reversal in the pair’s broader structure.
- The crypto market is effectively caught between a softer interest-rate outlook and weaker overall risk appetite.
FX Snapshot
XAUUSD
Attention now turns to the minutes of the Fed’s latest meeting due tomorrow, and if they confirm a cautious approach towards further tightening, buyers could regain momentum, whilst a more hawkish message would increase the risk of another pullback.
EURUSD
The main argument backing the pair remains intact: markets are doubtful about another near-term Fed rate increase.
BTC
Bitcoin is now trading at the point where a failure by buyers could turn an existing quiet range into a fresh move lower.
Market tone
Markets remain cautious and two-sided this morning: oil and Treasury yields are rising on geopolitical concerns, whilst the US dollar is receiving some short-term support, yet expectations of another Fed rate increase remain considerably weaker.
