Who else is looking at the U.S. dollar today?
If you are, then you might like to shake things up by starting your week with spot gold (XAU/USD) trading!
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Javier Milei, who advocated for replacing the local currency with USD, won Argentina’s Presidential Election
People’s Bank of China (PBOC) kept its benchmark lending rates – the one-year and five-year loan prime rates – steady at 3.45% and 4.20% respectively
Germany’s producer price index for October: -0.1% m/m (0.0% m/m forecast, -0.2% m/m previous)
Price Action News
Overlay of USD vs. Major Currencies Chart by TradingView
A lack of fresh catalysts made it easier for the U.S. dollar to extend its declines against its major counterparts.
If you recall, the markets are pricing in a dovish Fed following weak inflation and employment reports last week.
USD is trading in the red across the board but is especially weak against JPY, NZD, and AUD.
Upcoming Potential Catalysts on the Economic Calendar:
BOE Gov. Bailey to give a speech at 6:45 pm GMT
New Zealand’s trade balance at 9:45 pm GMT
RBA Gov. Bullock to give a speech at 11:00 pm GMT
RBA’s meeting minutes at 12:30 am GMT (Nov. 21)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
XAU/USD 1-hour Forex Chart by TradingView
There are not a lot of new market movers to price in today and our economic calendar also doesn’t give news traders a lot to work with.
So, unless we see market-changing headlines in the next trading sessions, we can continue to trade the U.S. dollar’s weakness.
As mentioned above, Asian and European session traders seem game to extend last week’s anti-USD theme. If you recall, the markets are betting on the Fed dialing down its hawkish rhetoric following weaker-than-expected inflation and employment numbers last week.
One of the winners of the anti-USD environment is spot gold (XAU/USD), which has popped up higher lows and higher highs since last week.
XAU/USD is trading near $1,975 which is close to an ascending channel support. In this case, XAU/USD’s current levels are also a few points away from the Pivot Point ($1,968) line and the 100 SMA in the 1-hour time frame.
Can the pair extend its uptrend today?
There are no major economic data releases scheduled during the U.S. session so it’s more likely than not to see a trend extension for XAU/USD and other major USD pairs.
A bounce from the $1,970 area coupled with a couple of bullish candlesticks may draw in gold bugs and push XAU/USD to its previous highs near $1,990.
Let’s not discount a possible reversal though.
If U.S. session traders take profits ahead of this week’s FOMC meeting minutes, or if USD holders take profits during the shortened holiday week, then XAU/USD could trade below its trend line support.
Watch out for XAU/USD trading consistently below the $1,968 Pivot Point line in case the U.S. dollar sees multi-day gains ahead of the holiday weekend in the U.S.