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The euro currency has remained under pressure against the US dollar during the European trading session, with the EURUSD pair struggling below the 1.1431 resistance level. The MACD and Momentum indicators on the four-hour time frame are now starting to turning lower. The next directional move in the EURUSD pair will likely come after the release of the FOMC interest rate decision.

The EURUSD pair remains intraday bearish while trading below the 1.1431 level, key support is found at the 1.1387 and 1.1352 levels.

If the EURUSD pair moves above the 1.1431 level, key resistance is found at the 1.1500 and 1.1552 resistance levels.

The US dollar is pressing towards the best trading levels of the month so far against the Japanese yen after dip-buyers defended the 113.00 support level. The USDJPY pair is bullish while trading above the 113.37 level and is supported by intraday US dollar strength and rising optimism over Sino-US trade talks on Friday. A break above the 113.81 resistance level will likely prompt strong technical buying, while a move below the 113.37 level may provoke a test of the 112.90 support level.

The USDJPY pair is strongly bullish while trading above the 113.81 level, key resistance is now found at the 114.10 and 114.54 levels.

If the USDJPY pair trades below the 113.37 level, sellers are likely to test the 112.90 and 112.50 support levels.

EUR/USD

Current level - 1.1415

The market is getting ready for today's interest rate decision, which could result in additional volatility, but the overall bias remains positive, for a test of 1.1550.

USD/JPY

Current level - 113.70

The failure at 113.00 has obviously halted the bearish bias and the uptrend since 111.38 low remains intact. My outlook however remains counter-trend, for a slide towards 111.60.

GBP/USD

Current level - 1.3119

The reversal at 1.3175 signals a minor corrective pattern, preceding another wave upwards, to 1.3250. Crucial support lies at 1.3040.

Fed won't hike today

As US election risk fades, so does risk aversion. However, the risk rally has been weak. High beta, trade sensitive emerging market currencies INR, ZAR, TRY and CLP have seen heavy buying in the past week. Markets are pricing in a South African rate hike in November due to rising inflation, giving ZAR an extra boost. Traders remain cautions of the current rally, doubting the fundamentals. Markets are preaching the goldilocks conditions: President Trump will balance out fiscal and monetary easing. Heading into 2019, event risks are low and global growth slowdown is already priced in. Equity markets should further improve and USD weaken.

Today's meeting of the US Federal Reserve Bank is likely to keep interest rates on hold in the current target range of 2.00-2.25%. Given this and that no press conference is scheduled, market reaction will be limited. In Europe, the European Commission will provide economic forecasts showing Italy's 2019 deficit to be higher than estimates from the government in Rome. Switzerland's unemployment fell to 2.4%, which is nearly full capacity: this is likely to trigger inflation. If Trump goes positive on trade in the second half of his presidency, Swiss growth would accelerate, potentially forcing the Swiss National Bank to hike earlier than expected (current expectation: 4-6 months after the European Central Bank's first hike in September 2019).

China equities will bounce bank

China is ideally positioned, but needs improvement on US trade tensions to stage a solid recovery. We continue to position for a strong China equity bounce.

China's inflation has weakened slightly to 2.4% yearly in October from 2.5% in Sept due to weaker food prices. The net effect of tariffs is uncertain. China's export growth (in USD) rose further from 14.5% yearly in September to 15.6% in October, beating expectations. China's exports to the US fell to 13.2% annualised in October from 14% in Sept (12.9% in Q3). The 10% additional tariff on USD 200 billion of Chinese goods kicked in only on 24 September.

WTI oil is consolidating above new marginally lower 7 ½ month low at $71.19, posted on Wednesday in extension of massive fall which extends into fifth straight week.

Fading concerns about stronger impact on global supply from sanctions on Iran and another rise in crude stocks (EIA report on Wednesday showed build of 5.78 million barrels vs forecasted rise of 2.43 million barrels) along with increase in global oil production (US, Russia, Saudi Arabia, Iraq) continue to weigh strongly on oil price and maintain strong bearish sentiment.

On the other side, signals that China is on track to keep its oil imports at record highs this year, provides support, which is so far insufficient to offset strong negative sentiment.

Strong recovery rejection on Wednesday which left daily Doji candle with long upper shadow, adds to negative outlook but at the same time signals indecision.

Oversold daily studies warn that bears are running out of steam and generate initial signals of correction.

Daily slow stochastic and RSI are turning north and reversal from oversold territory would provide support scenario.

Falling 10SMA ($63.99) and broken weekly cloud top ($64.66) mark pivotal barriers, break of which is needed to generate stronger bullish signal and put bears on hold.

Meanwhile, the price may hold in extended consolidation, with the downside to remain vulnerable, as bears keep psychological $60 support in focus.

Res: 62.40, 63.17, 63.99, 64.66
Sup: 61.62, 61.19, 60.80, 60.00

During Thursday's morning hours, the European Single Currency was trading between the 55-hour and the 100-hour simple moving averages at the 1.1423 mark.

In regards to the near-term future, most likely, the currency exchange rate will surge towards the 1.1480 level breaking the resistance of the 50.00% Fibo. The supports of the simple moving averages together with the monthly pivot point at 1.1413 should push the rate to surge during the trading session on Thursday.

On the other hand, today's significant fundamental release of the US Federal Funds Rate at 19:00 GMT could ignore the predictions for the currency exchange pair to push the European Single Currency to trade near the weekly PP at 1.1382.

During Wednesday's trading session, the 50.00% Fibo stopped the British Pound from the surge to end the trading session at the 1.3123 mark. On Thursday morning, the British pound was located between the 50.00% Fibonacci retracement level and the monthly R1 to trade at the 1.3123 mark.

In regards to the near-term future, most likely, the British Pound will surge upwards breaking the resistance of the upper boundary of the descending dominant pattern line at the 1.3150 mark to trade at the 1.3200 level. The 55-hour simple moving average should support the surge during the trading session on Thursday.

However, the 50.00% Fibonacci retracement level could resist the currency exchange pair to push the decline to the 1.3050 level.

During Wednesday's trading session, the currency exchange pair surged to the 113.40 level to end the trading session at the 113.54 mark. On Thursday morning, the US Dollar was located near the weekly R1 at the 113.69 mark.

In regards to the near-term future, most likely, the US Dollar will surge towards the 114.00 level breaking the resistance of the weekly R1 at the 113.81 mark. It is expected that the surge will be followed during the US Federal Funds Rate release at 19:00 GMT on Thursday.

On the other hand, the weekly R1 at the 113.81 mark could resist the rate to push the US Dollar to depreciate to the 113.60 level during the trading session.

During Wednesday's trading session, the yellow metal depreciated against the US Dollar to pass through the simple moving averages to end the trading day at the 1,225.17 mark. On Thursday morning, the gold was located below the 200-hour simple moving average to trade at the 1,224.15 mark.

In regards to the near-term future, the gold will try to trade upwards but most likely, it will be resisted by the SMAs due to a lack of any support levels. Possibly, the rate will be trading at the 1,220.00 level during the trading session.

On the other side, today's US Federal Funds Rate release at 19:00 GMT could depreciate the US Dollar against the gold to push the yellow metal to surge!

Markets pare post-election gains

The post-election bounce was strong but short-lived, with US futures slightly in the red ahead of the open as traders turn their attention to today’s central bank announcement.

The first of the week’s two major risk events – from a US perspective – may have passed without any disruption but there’s still one more to come before investors can fully relax. The feared blue tsunami turned out to be more of a shallow wave, which investors are more than content with. Rather than contemplating a possible reversal of tax cuts, we’re weighing up the prospect of infrastructure spending which has bipartisan support; it’s no wonder we saw a relief rally on Wednesday.

Will Fed soften hawkish rhetoric?

The Fed meeting was always the lesser of the two risks but investors will still be following it extremely closely. Interest rates remaining unchanged is almost an inevitability but the statement that follows will be poured over for any indication that recent market volatility has in any way softened plans for hikes this year and next.

It was Jerome Powell that appeared to be the catalyst for the recent stock market sell-off when he suggested that interest rates were not close to neutral and could become restrictive, which got investors worried about the economic ramifications of such a move. The Fed may seek to clarify this in the statement today, although given the lack of a press conference I wonder whether they will instead hold off and see if the situation settles down on its own.

It would make much more sense, given the recovery we’ve seen in the market, for the Fed to address the interest rate path in December when it is widely expected to raise again. This would give them the opportunity to clarify anything in the press conference that follows and lay out clear plans, alongside the dot plot, for the coming years. Instead today it may just emphasise the cautious and gradual approach to rate hikes.

Oil stages recovery on OPEC+ output cut speculation

Oil is staging a small recovery today with Brent and WTI trading around 1% higher ahead of the weekend meeting of OPEC+ in Abu Dhabi this weekend. There has been suggestions that the group could cut production again next year in an attempt to rebalance the market, with inventories rising once again and oil prices dropping 20% in a month. The decision to grant temporary waivers to eight countries that import Iranian crude has been partly attributed to the drop, while rising inventories and US production is also contributing to the shift in sentiment towards oil.

Gold edging lower on stronger dollar

Gold is edging lower again on Thursday, coming under a little pressure as risk appetite continues to grow and the US dollar creeps up. The declines we’re seeing in the yellow metal are only small though and underlying sentiment towards it seems to remain positive. The US dollar may be holding up for now but I’m not convinced that will last much longer which could be supportive for Gold, especially if it’s combined with a slight softening of the hawkish Fed rhetoric.