Forex Today: What could happen if the ECB…?

Wednesday brought renewed downside pressure on the US Dollar (USD). Investors continued to assess the latest FOMC event against a mixed performance across the US Treasury yield curve.

The 102.00 support zone is back in focus for the US Dollar Index (DXY), as renewed selling ended its three-day winning run. The data calendar includes the regular weekly Initial Jobless Claims, PCE, Personal Income/Spending and the preliminary Q3 GDP Growth Rate.

The 1.1170 region came under pressure as EUR/USD recovered, ending five consecutive daily declines. At its upcoming meeting, the ECB is expected to leave its policy rate unchanged. The final eurozone Consumer Sentiment reading is also due.

A retest of the 1.3340 area left GBP/USD modestly higher, following a solid rebound from fresh multi-day lows near 1.3270. Scheduled releases include the BoE’s Consumer Credit, Mortgage Approvals/Lending, M4 Money Supply and Net Lending to Individuals figures.

The key 158.00 barrier capped USD/JPY’s rally, with the pair ultimately closing slightly lower near 157.80. Consumer Confidence and the regular weekly Foreign Bond Investment figures are next on the calendar.

The critical 200-day SMA around 0.7060 is being tested by AUD/USD after further gains took the pair to fresh five-week highs. Australia’s only scheduled data release is Export/Import Prices.

Above $103.00 per barrel, front-month WTI futures (December contract) reached weekly highs as upward momentum returned. Traders were weighing renewed concerns over Middle East supply.

The $4,000 per troy ounce level was within close reach as Gold turned lower again after two consecutive daily gains. Higher crude oil prices and a solid rise in US Treasury yields across the curve weighed on the metal.