Eurozone GDP And FOMC Meeting In Focus

The U.S. dollar was seen maintaining the bullish momentum on the day. European markets were closed on account of the 1st May bank holiday. Economic data showed that the UK’s manufacturing PMI was weaker than expected at 53.9.

In the U.S. the ISM manufacturing PMI was seen falling to 57.3 missing forecasts of 58.4 and slower than the March PMI reading of 59.3.

On the political front, the U.S. administration was seen exempting South Korea, Mexico, Canada and the EU from the steel and aluminum tariffs that were due to come into effect from the 1st of May. However, the exemption is not long term as the U.S. only delayed the tariffs by 30 days for the above nations.

Looking ahead, the economic calendar today will mark the release of the UK’s construction PMI data which will conclude the monthly PMI’s for April. Economists forecast that the UK’s construction activity slightly improved to 50.5 after falling into contraction the month before.

The Eurozone will be releasing the manufacturing and services PMI data for the month of April. No major changes are expected but activity is expected to remain subdued. The flash GDP estimates for the first quarter will also be released this week. The Eurozone GDP is forecast to rise 0.4% on the quarter, marking a slower pace of increased from 0.6% in the previous quarter.

The FOMC statement will take center-stage today. No changes are expected to the short-term interest rates. There will be no press conference or any economic projections.

EUR/USD Intra-Day Analysis

EUR/USD 4 Hour Chart

EUR/USD (1.2005):The EUR/USD currency pair was seen testing fresh monthly lows on Tuesday. The common currency touched lows of 1.1981 before recovering only modestly. The breakdown below the 1.2090 – 1.2070 level indicates that any near-term gains would be limited to this level where resistance could be established. The 4-hour Stochastics remains in the oversold region which indicates a potential rebound in prices in the near term.

GBP/USD Intra-Day Analysis

GBP/USD 4 Hour Chart

GBP/USD (1.3612):The British pound continued the declines yesterday following the doji pattern that was formed the previous day. The breakout from the long term rising trend line indicates that GBP/USD is likely to push lower. The next main support level is seen at 1.3530 which could be tested in the near term. A rebound in prices cannot be ruled out as we expect to see a modest correction in the near term. Further declines cannot be ruled out if GBP/USD breaks below 1.3530 which will see the next support level at 1.3500 coming into the picture.

XAU/USD Intra-Day Analysis

XAU/USD 4 Hour Chart

XAU/USD (1310.43):Gold prices posted a strong decline on the day as price action slipped below the 1311 – 1307 level of support. Gold prices briefly dropped to the 1301.80 level before recovering. With price action back in the support zone, only a clean breakout above 1311 will signal further gains. To the downside, we expect price action to be limited at the current levels. The previously breached support level at 1325 remains the upside target which could be tested for resistance.

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