Selling and buying forces in USD appear to be roughly balanced near the 95.50 mark on DXY amid signs of easing Treasury sell-off. The yield on 10-year US Treasuries pricked 1.90% on Wednesday and then turned into a decline, the pressure of sellers in the stock market, judging by modest upside in futures, is also likely to weaken today. The situation is similar for oil – there was a test of $88/bbl for WTI on Wednesday, today buyers eased pressure. Everything that the market wanted to price in regarding inflation outlook before the Fed’s decision next week seems to have been priced in.The latest inflation data in Australia missed expectations, quarterly price growth has stabilized at 3.0%. This is much less than in Europe or the USA. The markets expect tightening of the RBA policy at a rate similar to the US, however, the trend in inflation speaks in favor of a more cautious Central Bank at the upcoming meeting on February 1.AUDUSD has been moving in a clear uptrend since mid-December, reflecting optimism in the commodities market. Given the potential test of 90 WTI before the Fed meeting, the nearest target for a short-term upward movement is 0.7350:EURUSD is trading in a narrow range today, while remaining in a moderate upward channel in the short term. Breakdown and ability to stick below the lower border will probably open up an opportunity to test the horizontal support at 1.12:Today, the minutes of the last ECB meeting will hit the wires, which may shed light on the central bank’s plans to curtail bond purchases. Often, the Minutes carry little new information, unlike the Fed’s minutes, and is unlikely to indicate that the ECB is in a hurry to tighten policy. However, the failed attempt by the Euro to strengthen may mean that EURUSD is still under the control of the sellers and the release of new information may contribute to increased sales.
Source: Tickmill
