US dollar ramps Up

Midday Update

The Cable is trading near 3 weeks low at 1.3430 amid Fed hike bets. During the European session open the GBPUSD remains in a consolidation between 1.3495 and 1.3467 as investors remains cautious on risk assets amid geopolitical tensions in Ukraine.

Also, the CBI Industrial Trend orders for January is positive but remains an early indication to experience an economic turnaround. A break below 1.3430 could trigger a sell-off on the GBPUSD and reinforce a bearish outlook in the near-term.

The EURUSD break below a critical support at 1.1300 psychological figure reinforces a bearish outlook in the near-term. Since the Asian Session, the EUR continues to suffer losses against the USD as investors eye the outcome of the 2-day FOMC policy meeting.

The EURUSD trend steadily trades lower and faces a short-term barrier at 1.1270. Traders should watch out for New York open as US prescheduled consumer confidence for January will indicate the health of the US economy and an early indicator for inflation.

EUR continues to shade its Monday gains against the Pound as the asset trades lower in European session open from 0.8400 to 0.8366. The EURGBP is used by professional traders to gauge the strength between the EUR and the GBP.

As it currently stands the strength in the EUR against the GBP in the near-term suggest a deeper bearish sentiment across Pound pairs. A break above the 0.8421 resistance could eventually signal a return of EUR strength in the near-term.

The AUDUSD traded lower during European session despite a spike towards 0.7175 in Asian session, which was inspired by positive Consumer Price Index (CPI) quarter on quarter which beat expectations.

The CPI is an early indicator of inflation, and it can be used by traders to forecast the Central bank’s policy direction on interest rates, however the current trend remains bearish as the asset continues to trade below the 200day Moving Average.

Technically the AUDUSD could trade lower towards 0.7100 psychological figure before a change in market direction. The European stocks opened higher in European session; FTSE 100 index rises 1.06 %, DAX gains 1.10% and EUR STOXX50 1.24%.

Oil prices recovered some of the previous day loses as the geopolitical tensions’ fuel supply fears. During European session the USDWTI remains in consolidation between 84.24 and 83.16 support. Investors keenly wait for crude oil supply data due for release during New York Session and traders could price in a bullish continuation if the statistics comes out positive.