- The greenback traded in a narrow range. It still to be seen whether or not the dollar will go down resulting from the rumors that the implementation of tax reform in U.S is expected to be delayed.
- The British pound declined sharply due to concerns over the upcoming new round of Brexit negotiation.
The dollar gapped higher slightly against a basket of six majors this morning with focus on the unveiling of tax reform bill in the U.S. which could potentially determine whether or not the buck could maintain its uptrend amid rumors that the implementation of tax reform is expected to be delayed after the greenback whipsawed throughout the day Wednesday 8 November. The British pound slipped sharply yesterday on the strong concerns over Brexit negotiation with EU which is due to carry out today. It will be interesting to watch whether or not the sterling decline could continue going forward.
The dollar index (DXY) traded in a narrow range. Its short term moving averages further flattened after contraction above its long term moving averages which remained bullish and diverging and offered some supports on the 4 hour chart. Be aware of the diverging direction in the short term moving averages and the impacts concerning tax reform bill in the U.S.
（DXY H4 chart）
Switching gears to non-U.S. currencies now, the euro traded in a narrow range on the 1 hour chart and saw its short term moving averages flattened along with its long term moving averages after converging, holding below resistance at H4-period EMA60. The British pound slumped as expected after its double-top configuration was validated. It will be interesting to watch the change in the downside momentum as the sterling could potentially extend decline in the short term. The Aussie dollar rallied in Asian and London session. The commodity currency whipsawed in New York session after reaching H4-period EMA50. Keep an eye on its moving averages and watch whether or not they will converge due to consolidation in the price action. Stay tuned to its short-term direction.
（GBPUSD H1 chart）
As to precious metals, the gold rallied in the choppy Asian and London session before reacting off highs at 138.2 Fibonacci level of prior down move in New York session. The price retested its H1-period EMA60 to see whether or not the prior bullish breakout resistance now acting as pull-back support is effective. Watch whether or not its short term moving averages could turn higher and divergent again above its long term moving averages on the 1 hour chart.
（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.