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EUR/USD is consolidating higher after setting a new hourly resistance at 1.1575 (27/10/2017 low). Hourly resistance is located at 1.1658 (30/10/2017 high). Expected to show some shortterm consolidation.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance is holding at 1.2252 (25/12/2014 high) while strong support lies at 1.0341 (03/01/2017 low).

WTI oil futures are trending higher and have shifted to a more bullish bias after breaking above the 53.00 level. The recent rally stalled at 54.43, a level not seen since late February.

Risk is to the upside but the market is now consolidating recent gains and is pivoting around the 54.00 level after upside momentum got exhausted. The positively aligned 20 and 50-period moving averages support the bullish view.

Soft support is at 53.71, the October 27 low and a break below it would shift the focus to the downside to target 53.00, placing the market back to a broader neutral trend. The next downside targets are at strong support levels which are expected at 51.00 and 49.00 and 47.00.

Rising above the 54.43 peak would put prices on the path for a move towards the previous major peak at 55.00 (February 21 high).

Looking at the 4-hour chart, WTI oil futures are steady in a small range. After RSI reached oversold levels above 70, it was expected that the market would consolidate. A daily close above 54.00 would be constructive for the bullish outlook.

In line with expectations, the Euro continued to successfully recover against the Dollar until it met the first line of defence set up by the monthly S1 at 1.1658. Nevertheless, a pressure from the 55-hour SMA is likely to provoke the pair to make another attempt to break to the top. On the one hand, a combined resistance formed by the weekly PP at 1.1674 and the 100-day SMA represent too strong barrier to be so easily crossed. On the other hand, the exchange rate two days ago made a rebound from the bottom edge of a senior descending channel. From this perspective, the pair is expected to climb upstairs for some while. An additional impulse might be provided after today's release of the Euro Zone's inflation data.

The first arrests made in result of Robert Mueller’s investigation as well as anticipation of the upcoming interest rate hike helped the pair to prematurely break through a massive resistance set up by three moving averages plus the weekly PP at 1.3160. In general, bulls are expected to try to push the cable to the last Thursday’s pre-fall level at 1.3270. However, today this attempt is likely to be blocked by another resistance level formed by the weekly R1 at 1.3250 and the upper trend-line of an alleged two-month long descending channel. On the other hand, there is a need take into account effect from release of various American fundamental data later this day, which might either provide an additional impulse for a breakout to the top or drag the pair back to the 100-hour SMA.

On Tuesday, the Bank of Japan left the interest rate, target inflation and core inflation forecast unchanged. In other words, they still amount to -0.1%, 2% and 1.8%. However, since this decision was widely expected, the Yen did not gain much value against Dollar. In fact, it stuck at the weekly S1 at 113.13. However, this correction is likely to last only until release of the American data. Depending on the actual figures the pair might either surge to the combined resistance set up by the 200-, 100- and 55-hour SMAs near 113.60 or slip further to the weekly S2 located at the 112.58 level. From daily perspective, the pair is expected to start gradually moving in the southern direction, as previous two days marked a long awaited breakout from the rising wedge formation.

The Gold prices continued to rise on Monday, following reports about the 1.3% PCE Price Index release as well as rumours that President Trump will chose Governor Powell take the Fed Chair seat. From technical point of view, this three-day growth has practically resulted in a breakout through the upper edge of recently formed descending channel. At the moment, the only barriers that constrain the bullion from climbing further are the 200-hour SMA near 1,277.16, the 61.8% Fibonacci retracement level at 1,279.00 and an alleged resistance near 1,281.57. One of these barriers as well as the weekly PP and the 100-hour SMA from the bottom are likely to constrain the pair from making major advances in the first half of the day. To be precise, until release of information on the US Consumer Confidence.

The Japanese Yen edged lower against the Greenback, following the Bank of Japan’s monetary policy report. The USD/JPY currency pair rose 15 base points or 0.13% to continue consolidation in the narrow range between the 113.05-113.25 marks.

The Bank of Japan announced its decision to maintain the key interest rate unchanged at a negative 0.1% and keep the target for the ten-year government bond yield at 0%. The Bank postponed its monetary policy changes amid signs of improvements in the country’s economy, still anticipating the inflation growth to the elusive 2% target. The following review of the BOJ projections showed that it cut price growth forecasts for 2017, but kept optimistic view for the next years.

The Greenback strengthened against the Euro, as the Monday report showed that US consumer spending jumped significantly in September. EUR/USD decreased 16 base points to enter the 1.1610 area, but the European single currency managed to bring the pair back to 1.1655.

The Commerce Department showed that consumer spending, which constitutes nearly two-thirds of the US economic output, grew 1.0% in September, the strongest gain since 2009, after a modest 0.1% rise in the prior month. The increase was driven by households replacing hurricanes-damaged vehicles as well as higher purchases on utilities. The Federal Reserve is set to announce its interest rate decision on Wednesday, taking into account current inflation trends.

The Euro fell against the Sterling on the release showing solid gains in the Euro zone’s economic confidence. After the report, EUR/USD started sharp downmove to touch the weakest level in two weeks of 0.8799.

The European Commission stated that confidence in the Euro zone’s economic outlook rose to the highest level since January 2001 this month, with the Sentiment Indicator reaching the 114 points in the observed period. Data reflected the strong EZ economic growth seen in the first half of 2017, which was likely to continue further, though the ongoing crisis in Catalonia could drag on the bloc’s expansion by the end of the year. The next moves in the exchange rate are set to be determined by the EU GDP report today.

EUR/USD

Current level - 1.1636

The rebound after 1.1570 is still underway, with a risk of breaking higher, towards 1.1700-1720 static resistance. The latter should cap the upside and is expected to initiate a start of another sell-off, towards 1.1480 and 1.1300.

USD/JPY

Current level - 113.08

The slide through 113.30 low shows, that the negative bias, which originated at 114.50 is still intact, but my outlook is counter-trend, for a reversal above 112.40 and renewal of the rise towards 115.50. Key hurdle lies at 113.50.

GBP/USD

Current level - 1.3208

Yesterday's violation of 1.3180 minor hurdle shows, that the rise from 1.3067 low is a part of the prolonged consolidation pattern on the daily frame above 1.3020 and the intraday bias is positive, for a break through 1.3220, towards 1.3280, with a risk of another attempt at 1.3340. The mentioned leg from 1.3067 should be considered a prelude to a new sell-off on the senior frames, to 1.2760. Key intraday support lies at 1.3150.