AUSSIE SOARS TODAY, VOLATILITY LIKELY TO RISE TOMORROW
The EUR/USD price declined in anticipation of the FOMC statement on monetary policy that will be released tomorrow. Also to be announced on Wednesday are the forecasts for the US economy and we may see some hints concerning monetary tightening plans for 2018. Most analysts are predicting three rounds of rate hikes during the next year, but its influence on the EUR/USD pair may be partially offset by the termination of the asset purchasing program in the Eurozone and possible increase of interest rates by the ECB.
The GBP/USD quotes fell today on the background of higher than expected inflation level in November. The consumer price index in the UK was 3.1% in the previous month, which is 0.1% above the forecast. High inflation against slower wage growth will negatively influence consumption within the United Kingdom, but on the other side, it may force the Bank of England to increase interest rates that will likely support sterling bulls. Currently investors are restrained as they wait on the Fed’s statement on monetary policy and the UK labour market data that are both due to be published tomorrow.
The Australian dollar has changed direction and currently demonstrates confident growth which is supported by positive dynamics from the commodity markets that traditionally influence the price of the aussie. Today, some impact on the course of trading may come from the consumer sentiment index calculated by Westpac due at 23:30 GMT.
The EUR/USD keeps falling after an unsuccessful attempt to start the new local ascending trend and gain a foothold above 1.1800. The closest target in case of a continued fall will be at 1.1730 and its breaking through will be the basis for a further decline to 1.1620. On the other hand, confirmation of the buy signal with objectives at 1.1925 and 1.2000 may come from the price fixing above 1.1800.
The GBP/USD price has fallen to the inclined support line but was not able to overcome it. In case of further rebound, quotes may overcome 1.3400 and hit the important 1.3550-1.3600 range. On the other hand, fixation under the closest low near 1.3300 may become the trigger for a massive selloff with immediate goals at 1.3250 and 1.3150.
The AUD/USD price demonstrates a confident rising impulse and was able to break through the 0.4565 resistance line. The closest target within the current impulse will be at 0.7600. The RSI recently touched the overbought zone and there is a chance of a price correction soon to 0.7565 or even below. Volatility levels are likely to remain high.