The US dollar spent Wednesday without a clear directional impulse and softened modestly against several major currencies; gold continued trading close to $4,400; EURUSD remains close to 1.1630, maintaining the consolidation pattern; Bitcoin stayed anchored around $78,500, having failed either to establish a recovery or develop a bearish impulse.
- Today the USD would definitely move out of the range with the ECB rate decision followed by US PPI, creating the conditions for a significant expansion in intraday volatility.
- A recovery above $4,450–4,460 would provide the first meaningful technical confirmation of renewed buying momentum in gold.
- A 25bp ECB rate increase is largely priced in, meaning the decision itself may be insufficient to generate a sustained appreciation in the euro.
- The Bitcoin’s structure reflects a lack of conviction on both sides so far.
FX snapshot
XAUUSD
Currently, higher oil prices reinforce inflation risks, meaning a strong US PPI print could place renewed short-term pressure on XAUUSD.
EURUSD
The combination of the ECB decision and the US PPI should finally provide a meaningful test of the established EURUSD range.
BTC
The ECB decision is of secondary importance for Bitcoin, whilst the US PPI has considerably greater potential to move the price either way.
Market tone
Yesterday the market traded within the levels – today should become a market of catalysts. With the ECB rate increase largely priced in, EURUSD volatility should be driven primarily by forward guidance, while PPI will shape the initial reaction across the USD, gold, and Bitcoin ahead of Friday’s more important CPI release.
