Market Overview
- Major currency pairs and Gold experienced significant movements on Tuesday. The EUR/USD pair hovered around 1.1300, with investors awaiting the Federal Reserve's rate decision on Wednesday.
- GBP/USD rose by 0.4% amid news of a potential US-UK trade deal to avoid tariffs.
- Renewed conflict between India and Pakistan led to a surge in Gold prices, which increased by over 2.70% to $3,400.
- Wall Street ended with losses as markets digested President Trump's comments on trade policy.
- The AUD/NZD pair traded near the 1.0800 zone after declining in the European session, while USD/JPY traded lower near 142.00 due to safe-haven demand for the Japanese Yen.
- The US Dollar Index fell ahead of the Federal Reserve's rate decision, while the Australian Dollar strengthened against major currencies.
Fundamental Analysis
- Major economic events and data releases had a significant impact on forex markets. Inflation data and economic indicators such as GDP and trade balance influenced the value of major currencies.
- Central bank statements also played a crucial role, with the ECB's impact on the Euro being significant as it sets interest rates and manages monetary policy to maintain price stability.
- The Bank of England is expected to cut rates on Thursday, while the Federal Reserve is anticipated to keep rates steady.
- Political developments also influenced market sentiment, with renewed conflict between India and Pakistan escalating tensions.
Technical Analysis
- EUR/USD found support above 1.1200, with traders cautious ahead of key market developments.
- GBP/USD is consolidating between 1.3450 and 1.3250, with support near 1.2830.
- Gold price technical outlook suggests a challenge to $3,350 support.
- USD/JPY shows bearish signals, with key moving averages pointing lower. A break below 142.00 could lead to more losses.
- AUD/NZD shows a bearish bias supported by long-term averages, with key support below and resistance from short-term moving averages.
Conclusion
- The market outlook remains cautious ahead of the Federal Reserve's rate decision on Wednesday.
- Potential trading opportunities may arise from the expected rate cut by the Bank of England and the anticipated steady rates from the Federal Reserve.
- Investors are also closely watching geopolitical developments, particularly the renewed conflict between India and Pakistan, for potential market impacts.
