- The dollar index declined for the fourth trading day in a row after the release of minutes from FOMC at its September meeting which showed some FED members cautious on another rates hike by the end of 2017 and which was less hawkish than expected.
- OPEC forecasted higher global demand for its oil in 2018 in its latest monthly oil market report. The cartel said the world would need 33.06 million barrels per day (bpd) of its crude next year, up 230,000 bpd from its previous forecast. Combined with the relatively high level of implementation rate, gave solid boosts to the oil.
The dollar fell further against the basket of six majors for the fourth trading day in a row in a choppy market on Wednesday 11 October. The greenback could drop towards 92.5 in the short term as the less-hawkish-than-expected FOMC’s minutes showed some members cautious on another rates hike by the end of 2017.
The dollar index (DXY) fell below H4-period EMA200. Its still-descending short term moving averages remained divergent with strong momentum and crossed below its long term moving averages which shifted to descend and turned convergent, could possibly turn divergent going forward. We may see the index correct previous declines in a consolidation mode.
（DXY H4 chart）
As far as non-U.S. currencies were concerned, the euro rallied further with modestly strong upside momentum, targeting short-term resistance at 1.1880. It is worth watching the change in the speed of up move. The British pound rallied to the 38.2% Fibonacci level of the prior decline above H4-period EMA60 resistance, could potentially turned choppy in the short term. The Aussie dollar bounced back in New York session and reacted off H4-period trend resistance. Whether or not the commodity currency could move up and test H4-period EMA60 resistance will be important to observe.
（GBP/USD H4 chart）
As to precious metals, the gold rebounded after going down but failed to create a fresh high of last week despite the significant weakness in the dollar. Its short term moving averages, and long term moving averages which remained bullish and pointing higher, both turned higher and divergent after penetration among each other on the 1 hour chart. Watch the potential change in the upside momentum. Whether or not the yellow metal could hit a fresh high of the week will be important to observe.
（Gold H1 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.