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EUR/USD recovers up to the 1.1250 region on dollar's weakness
  • US Dollar Index rebounds above 97.
  • 10-year US T-bond yield slips on Wednesday.
  • The FOMC to release the minutes of its last meeting later in the day.

After making a decisive break above the critical $1300 mark yesterday, the XAU/USD pair continued to push higher and touched its highest level in nearly two weeks above $1307, gaining more than $3 on a daily basis.

Earlier today, the data from the U.S. showed that the core Consumer Price Index, which strips volatile food and energy prices, increased 2% on a yearly basis in March to come in lower than the market expectation of 2.1%. Other details of the inflation report showed that CPI came in at 0.4% on a monthly basis in March following February's 0.2% reading. Despite the mixed data, the US Dollar Index recovered above the 97 mark ad ECB[1] President Draghi's cautious remarks during today's press conference reminded investors of the economic slowdown in the euro area and weighed on the major European currencies to help the greenback find demand.

On the other hand, the dismal market sentiment[2] caused the 10-year T-bond yield to push lower today, allowing traditional safe-havens such as the precious metal gather strength. At the moment, the 10-year T-bond yield is down nearly 1% as markets are waiting for the FOMC to publish the minutes of its last meeting.

"After the sharp drop in the dots, markets will be looking at just how dovish the FOMC has become in the release of the March minutes on Wednesday," TD Securities said previewing the FOMC event.

Key technical levels

The pair could face the initial resistance[3] at $1312 (Mar. 28 high) ahead...

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