The dollar index fell below 104 on Monday, reversing gains from the prior session as investors braced for the upcoming U.S. presidential election and a key Federal Reserve policy announcement. Recent market dynamics have pushed the dollar and Treasury yields higher amid speculation that Trump might regain the presidency this month. His proposed policies on immigration, tax cuts, and tariffs raised concerns about potential inflation. However, uncertainty surrounding the election results led traders to temper those expectations this morning. On the monetary policy side, the Fed is largely anticipated to lower interest rates by a modest 25 basis points this week, following a larger half-percentage point cut in September. Markets are also factoring in an additional quarter-point reduction in December.
In the EUR/USD pair, the initial resistance level is at 1.0910, followed by 1.0940 and 1.0960 as subsequent resistance points. On the downside, the first support level is 1.0870, which aligns with the 200-day moving average. If this level is breached, the next support levels to watch will be 1.0830 and 1.0800.
Gold Maintains Stability Amid U.S. Election Uncertainty
Gold continues stable movement at $2,740 per ounce on Monday after closing the previous week nearly stable as well. Political uncertainty in the U.S., potential inflation from a possible Trump presidency, and conflicts in the Middle East and Ukraine continue to drive investors to gold as a safe-haven asset. Betting site polls showed a switch from Trump to Harris over the weekend nearly declining from 66% to 54% further supporting the yellow metal with providing more uncertainty.
On the downside, the first support level for gold is at $2,735, followed by $2,714 and $2,685. On the upside, $2,758 serves as a key resistance level, with $2,770 and $2,790 as the next levels to monitor if this resistance is surpassed.
Traders Brace for Election Outcomes as Dollar Remains Firm
The dollar index remains steady at around 103.9 as uncertainty from the U.S. presidential election influences trading positions.
With a close race between Kamala Harris and Donald Trump, investors are also cautious before the Federal Reserve’s expected 25-basis-point rate cut. In Japan, the yen weakened to 152.3 per dollar following the Bank of Japan’s decision to maintain its interest rate, while speculation about a future rate hike persists. Gold holds above $2,730 as a hedge against inflation, while silver trades around $32.50 with attention on potential stimulus from China. The British pound is trading at 1.2960, with the election outcome expected to impact its direction.
The dollar index hovered around 103.9 on Tuesday, holding onto losses from the previous session as uncertainty surrounding the U.S. presidential election prompted traders to scale back some of their “Trump trade” positions. Recent polls show a tighter race between Kamala Harris and Donald Trump than initially expected, with market focus also on the balance of power in Congress. A potential sweep by one party could lead to major shifts in spending and tax policies. On the monetary policy front, the Federal Reserve is widely expected to announce a more cautious 25-basis-point rate cut on Thursday, as it faces the challenge of managing persistent inflation while responding to a slowing labor market. Markets are also factoring in the possibility of another quarter-point cut in December.
For the EUR/USD pair, the initial resistance level is at 1.0910, followed by 1.0940 and 1.0990 as subsequent resistance points. On the downside, the first support level is 1.0870, which aligns with the 200-day moving average. If this level is breached, the next support levels to watch will be 1.0830 and 1.0800.
GBP/USD is trading around 1.2960 on Tuesday morning, just ahead of the U.S. elections. The market focus will be on the election outcome, as it will likely influence the direction of the DXY and precious metals. Additionally, the Bank of England’s interest rate decision on Thursday will be a key factor in determining the direction of GBP/USD.
On the downside, key support levels for the GBP/USD pair are at 1.2945, 1.2885, and 1.2840. On the upside, resistance levels to watch are at 1.3010, 1.3045, and 1.3080.
Election-Driven Dollar Rally Pressures Global Currencies
Global markets are highly reactive as the US presidential election unfolds, with a strong dollar pressuring various assets.
The euro plunged to a four-month low against the dollar as Trump’s potential lead raised expectations of inflationary policies, while the ECB faces challenges from rising Eurozone inflation. Similarly, the yen weakened against the dollar amid increasing Treasury yields and Bank of Japan’s steady rate policies. Gold and silver prices fell as investors adjusted for a stronger dollar and the anticipated Federal Reserve rate cut. GBP/USD holds steady ahead of the Fed’s decision, as dollar strength supports a potential 0.25% rate cut.
The euro dropped 1.6% to around $1.075 on Wednesday, reaching its lowest point in four months, as the dollar strengthened following early signs that Donald Trump may be on track to win the US presidential election. The outcome of the race is now dependent on key swing states. In recent weeks, the dollar has been supported by Trump trades, driven by market expectations of higher inflation and increased government spending under his economic policies.
In Europe, investors continued to evaluate the European Central Bank’s (ECB) policy stance, especially after a surprisingly strong inflation report for the Eurozone. Annual inflation in the region rose to 2% from 1.7% in 2021, surpassing the anticipated 1.9%. Core inflation remained steady at 2.7%, slightly above the expected dip of 2.6%. As a result, markets are now fully pricing in a 25 basis point reduction in the ECB’s deposit rate in December, which would be the fourth cut following reductions in June, September, and October.
The first resistance level is at 1.0770 for EUR/USD, followed by 1.0830 and 1.0875 as the next resistance points. The first support level is 1.0700, which aligns with the 200-day moving average. If this level is breached, the next support levels to watch will be 1.0660 and 1.0600.
Gold fell more than 1% to around $2,710 per ounce, weighed down by a stronger US dollar as markets reacted to early results in the US presidential election. With polls closed in over two-thirds of states, Donald Trump had secured several early wins, and the election’s outcome now hinged on seven key swing states. Investors also kept a close eye on the balance of power in Congress, as it could have significant implications for future tax and spending policies.
In recent trading sessions, speculation that a Trump presidency might spur higher inflation, driven by his promises to raise trade tariffs, led many investors to flock to gold as a hedge against long-term inflation risks. Additionally, the Federal Reserve’s upcoming monetary policy decision on Thursday remained in focus, with markets widely anticipating a 0.25% rate cut. This is seen as supportive for gold, as lower interest rates reduce the opportunity cost of holding the non-yielding asset.
On the downside, the first support level for gold is at $2,700, followed by $2,685 and $2,670. On the upside, $2,715 serves as a key resistance level, with $2,735 and $2,758 as the next levels to watch if this resistance is surpassed.
Markets Await Fed, BoE Decisions as Dollar Surges Post-Election
Today, the market landscape cautious as the dollar rallies on Donald Trump’s U.S. presidential election victory, with investors focused on upcoming rate decisions from both the Federal Reserve and the Bank of England.
The EUR/USD remains under pressure with the dollar index hovering near multi-month highs, while the yen is vulnerable as Japanese authorities warn of potential intervention amid dollar strength. Gold and silver, pressured by the stronger dollar and shifting safe-haven sentiment, hold steady as traders await the Fed’s anticipated 25 basis point rate cut and any signals on future monetary easing. Meanwhile, GBP/USD is trading cautiously as the Bank of England’s rate decision looms, with expectations for a cut. This week’s pivotal data releases and central bank meetings are set to shape the next moves across currency and metal markets.
Gold Hovers Near $2,750 as Markets Await Fed’s Next Move
Gold held steady at around $2,650 per ounce on Thursday, after dropping more than 3% to a three-week low in the previous session, weighed down by a stronger dollar following Donald Trump’s U.S. presidential victory. Trump’s win has prompted traders to exit safe-haven gold positions, with expectations of higher interest rates from the Federal Reserve reducing the metal’s appeal. Trump’s campaign promises, which included policies on immigration, raising tariffs, tax cuts, and deregulation, have fueled concerns about larger deficits and inflation, further pressuring gold. Attention is now shifting to the Federal Reserve’s upcoming monetary policy announcement later in the day, where a 25 basis point rate cut is widely anticipated.
On the downside, the first support level for gold is at $2,635, followed by $2,600 and $2,570. On the upside, $2,670 serves as a key resistance level, with $2,695 and $2,715 as the next levels to monitor if this resistance is surpassed.
Yen Slips Further on Dollar Strength Post-U.S. Election
The Japanese yen traded around 154.4 per dollar on Thursday, lingering near a three-month low, raising concerns that Japanese authorities might intervene in the currency markets. Atsushi Mimura, Japan’s top currency official, warned that he is “closely monitoring FX movements with a heightened sense of urgency” and stands “ready to take appropriate action” if excessive volatility continues. The yen dropped nearly 2% on Wednesday, pressured by a sharp rally in the dollar after Republican Donald Trump’s clear victory in the U.S. presidential election. Meanwhile, new data showed Japan’s real wages declined 0.1% in September, as consumer inflation accelerated to 2.9%, outpacing the 2.8% rise in nominal wages. These wage figures further complicate the Bank of Japan’s outlook on potential interest rate hikes, which are already clouded by political uncertainty in the country.
In the USD/JPY pair, the first support level is at 153.80, which coincides with the 200-day moving average. If this level is broken, the next support levels to monitor are 152.20 and 151.50. On the upside, resistance levels are at 154.90, 155.70, and 156.60, respectively.
Global Markets React to the Fed Rate Cut Impact
Today, markets respond to the Federal Reserve’s recent 25-basis-point rate cut decision. It reflects a flexible approach, with Chair Jerome Powell highlighting a meeting-by-meeting policy stance, unaffected by the recent U.S. election outcome.
As expected, this rate adjustment has influenced currency values and commodity prices, with implications for future market movements. Let’s take a look at the roadmap for potential movements influenced by upcoming inflation data, trade policy shifts, and anticipated central bank actions in December.
The EUR/USD pair is trading around 1.0776 on Friday, while the dollar index remains steady at around 104.5 as investors digest the Federal Reserve’s latest interest rate decision. The Fed cut the federal funds rate by 25 basis points, as anticipated, with Chair Jerome Powell reiterating that the central bank is not following a predetermined course. He emphasized that future decisions would be made on a meeting basis and noted that the outcome of the upcoming election would not influence policy in the near term. Market expectations are for another quarter-point rate cut in December, although any unexpected inflation or labor market data could shift this outlook. There are fears that Trump’s proposed tariff hikes could reignite inflation, potentially preventing the Fed from continuing to lower rates. The dollar is poised to end the week with modest gains, as traders took profits following the post-election rally.
In the EUR/USD pair, the initial resistance level is at 1.0830, followed by 1.0875 and 1.0900 as subsequent resistance points. On the downside, the first support level is 1.0770, which aligns with the 200-day moving average. If this level is breached, the next support levels to watch will be 1.0700 and 1.0660.
BoE Cuts Rates to 4.75%, GBP/USD Holds Near 1.2970
The GBP/USD pair is trading around 1.2970 following yesterday’s decision by the Bank of England to cut its Bank Rate by 25 basis points to 4.75%, as expected. This marks the second rate reduction in four years, following the start of the BoE’s easing cycle in August. Eight out of nine members of the Monetary Policy Committee (MPC) voted in favor of the cut, surpassing expectations of seven votes, with Catherine Mann being the only member to vote for a hold. The decision reflects signs of slowing price growth in the UK economy, as September’s inflation dropped to a more than three-year low of 1.7%. Additionally, services inflation, which typically reflects more persistent price pressures, fell to a two-year low of 4.9%, although it remains elevated. While the BoE expects inflation to continue moderating in the medium term, it anticipates that the Labour Party’s expansionary budget will push inflation up by 0.5 percentage points at its peak. The central bank now forecasts year-end inflation at 2.5% and 2.2% by 2026. The budget is also expected to boost GDP by 0.75% at its peak impact within a year.
On the downside, key support levels for the GBP/USD pair are at 1.2950, 1.2900, and 1.2840. On the upside, resistance levels to watch are at 1.3000, 1.3050, and 1.3100.
Market Focus Shifts to Key Inflation Data and Central Bank Signals
Investors await crucial U.S. inflation data and Fed signals amid a resilient dollar in a cautious trading environment.
The EUR/USD remains steady as political uncertainties and Trump’s policies add pressure, while the yen weakens following BoJ’s rate discussions and potential intervention warnings. Gold and silver face downward pressure from inflation concerns and the strong dollar, with further volatility expected. Meanwhile, GBP/USD holds steady as the Bank of England’s rate decisions approach, with traders watching upcoming U.K. economic data closely.
EUR/USD Holds Steady as Markets Eye U.S. Inflation and Fed Signals
The EUR/USD traded around 1.0720 Monday, with the Dollar Index steady at 105 as investors awaited U.S. inflation data and Fed Chair Powell’s speech on Thursday for policy signals. Last week, the dollar saw volatility but rose overall, partly due to inflation concerns and Trump’s impact on the debt outlook. Despite a 25-basis-point Fed rate cut with limited guidance, the dollar remains strong, especially against the yuan, given China’s weak stimulus and inflation data.
For EUR/USD, resistance levels stand at 1.0780, 1.0830, and 1.0870, while support lies at 1.0680, with further levels at 1.0650 and 1.0600.
Gold Slips as U.S. and China Inflation Data Add Pressure
Gold slipped to around $2,670 per ounce on Monday, marking a second decline as markets await U.S. inflation data and Fed speeches for clues on rate policy. Last week, the Fed’s 25-basis-point rate cut suggested a slower pace of cuts amid inflation concerns tied to Trump’s policies. China’s inflation rate also hit a four-month low despite stimulus efforts.
For gold, support levels are $2,657, $2,635, and $2,600, while resistance is at $2,710, followed by $2,726 and $2,750.
Dollar Surge Pressures Major Currencies and Metals
The US dollar strengthened across markets as optimism about a potential second Trump presidency increased expectations for tax cuts, deregulation, and higher tariffs on China and the EU.
This drove the DXY to a four-month high and pressured major currencies like the euro, yen, and pound, with EUR/USD at 1.0630 and GBP/USD near 1.2820. Precious metals were also affected; gold fell to $2,600 per ounce, and silver dropped to $30.20 as investors moved to riskier assets. Key support and resistance levels remain in focus as markets await US inflation data and Fed signals.
Gold prices dropped to around $2,600 per ounce, marking the third session of losses and hitting a one-month low. The decline was driven by a stronger US dollar and waning demand for safe-haven assets. Investors continued to pivot toward riskier assets as they considered the potential economic impact of Donald Trump’s election victory, particularly regarding fiscal policies and monetary strategies.
The prospect of tariffs being introduced early in Trump’s presidency has raised inflation concerns, which in turn has led to expectations that the Federal Reserve may delay its easing plans into next year. As a result, the likelihood of a rate cut in December has decreased, falling from nearly 80% a week ago to around 65%. On the other hand, data from the World Gold Council reveals that holdings in Indian gold ETFs have surged, doubling over the past four years to a record 54.5 tonnes as of October 31st.
On the downside, the first support level for gold is at $2,600, followed by $2,550 and $2,500. On the upside, $2,615 serves as a key resistance level, with $2,655 and $2,685 as the next levels to monitor if this resistance is surpassed.
Silver is trading around $30.20, its lowest level in nearly two months, as a surge in risk sentiment dampened demand for the precious metal. This was compounded by weak fiscal support from China, the world’s top consumer of silver. The prospect of expansionary fiscal policies in the US prompted investors to shift away from precious metals like silver and into riskier assets such as growth stocks and cryptocurrencies.
China chose to restructure its public debt in its latest fiscal measures instead of introducing new fiscal stimulus, diminishing previous expectations of industrial support. This decision has weighed on the outlook for industrial metals, including silver, which is heavily used in sectors like electrification and solar panels. Adding to the pressure, Chinese solar panel manufacturers have reportedly begun scaling back production, partly in response to concerns over higher tariffs on the sector that could result from Trump’s election victory.
On the upside, the critical resistance levels to watch are 30.90, 31.65, and 32.00. On the downside, 29.85 remains a significant first support level. If this level is breached, the next support levels to monitor are 29.30 and 28.80, respectively.
