Article by ForexTime
The battered Dollar stabilised against its peers on Wednesday as investors pondered the possibility of a US Government shutdown on Friday.
Heightened political uncertainty in Washington is likely to weigh heavily on the Dollar and may fuel the downside. It is interesting that the Dollar remains at such depressed levels despite expectations of a US rate hike in March. Dollar bulls are clearly struggling to find fresh inspiration from Fed hike expectations, and this is reflected in the currency’s bearish price action. Appetite for the Dollar is at risk of diminishing even further if major central banks join the Federal Reserve and gradually tighten monetary policy.
From a technical standpoint, the Dollar Index still remains under pressure on the daily charts. A technical bounce could be in process, and might push prices into the 91.40 region. Alternatively, an intraday breakdown below the 90.34 daily low could invite a further decline towards 90.00.
Currency spotlight – GBPUSD
Sterling has jumped to its highest level since the June 2016 Referendum vote, thanks to ongoing Dollar weakness and market optimism over a soft Brexit.
While the Pound could venture higher in the near term, it must be kept in mind that the currency still remains highly sensitive to political and Brexit developments. Taking a look at the technical picture, the GBPUSD is incredibly bullish on the daily charts. Prices are trading above the 50 SMA while the MACD has crossed to the upside. A decisive breakout above 1.3850 could invite an appreciation higher towards 1.3920 and 1.4000, respectively. Alternatively, a failure for prices to close above 1.3850 may open a path back to 1.3700.
Commodity spotlight – Gold
Gold bulls displayed early signs of exhaustion on Wednesday after struggling to maintain control above $1340. Prices are currently trading around $1335.50 and could edge lower later in the day amid a stabilising Dollar.
From a technical standpoint, Gold still fulfills the prerequisites of a bullish trend based on the consistently higher highs and higher lows. A technical correction seems to be in process, with the next level of interest at $1325. If bulls are able to re-awaken before the $1325 level, the price could re-test $1340 and $1360, respectively.
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Article by ForexTime
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