Forex Today: Markets stay cautious ahead of the Fed

Multi-day highs have come back into view for the US Dollar (USD) as its recovery extends into the new week. Broad caution among market participants has supported further Greenback gains, while US Treasury yields have shown a mixed performance.

102.00 was briefly breached by the US Dollar Index (DXY). The move extended Friday’s gains ahead of key events and economic releases later this week. First up are the ADP Employment Change Weekly figures, followed by final Building Permits data, Durable Goods Orders, New Home Sales, the FHFA’s House Price Index, the Conference Board’s Consumer Confidence gauge and the API’s weekly US crude oil inventory report.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Below 1.1200, EUR/USD has revisited multi-day lows as sentiment towards the US Dollar improves further. The ECB’s Loan to Companies/Households figures are due before a speech by the ECB’s Lagarde.

Four-day lows in the 1.3330-1.3320 range have marked GBP/USD’s retreat, mirroring the downbeat tone across risk-sensitive assets. The next UK inflation indicator comes from the BRC Shop Price Inflation release.

Around 157.60, USD/JPY has reached two-day highs. A mixed US money market backdrop and further US Dollar strength have driven a solid rebound in the pair. Japan’s upcoming releases include the regular weekly Foreign Bond Investment figures and the Consumer Confidence reading.

The 0.7000 support zone appears to be holding bearish pressure in check for now, despite further choppy trading in AUD/USD. Attention in Australia will centre on the key Inflation Rate release on 28 October.

The psychological $100.00-per-barrel level briefly came into reach as front-month WTI futures (December contract) extended Friday’s retreat, before recovering some ground. Renewed hopes of a potential US-Iran agreement to end the Middle East conflict have put the commodity under further pressure.

Above $4,000 per troy ounce, Gold has recovered its footing after two consecutive daily declines. Falling crude oil prices appear to have supported the rebound, even as the US Dollar strengthened and US Treasury yields remained mixed.