EUR/USD
The EUR/USD pair trades in negative territory around 1.1490 during the early European session on Tuesday. The US Dollar (USD) strengthens against the Euro (EUR) as surging oil prices due to the US and Israel’s war on Iran have made traders more worried about inflation, triggering a sharp repricing of Federal Reserve (Fed) rate outlooks. The Fed and the European Central Bank (ECB) interest rate decisions will be in the spotlight later this week.
GBP/USD
GBP/USD inches lower after registering nearly 0.75 gains in the previous session, trading around 1.3310 during the Asian hours on Tuesday. The short-term bias stays mildly bearish as spot holds below the declining nine-day Exponential Moving Average (EMA) and now trades under the flatter 50-day EMA, signalling fading upside momentum. The recent sequence of lower closes from the 1.36 area and failure to reclaim the short-term average confirms that rallies remain vulnerable to renewed downside interest.
USD/JPY
The USD/JPY pair attracts some dip-buying during the Asian session on Tuesday and stalls its modest pullback from the 159.75 area, or the highest level since July 2024, retested the previous day. Spot prices currently trade around the 159.20-159.25 region, though bulls seem hesitant amid intervention fears and ahead of the key central bank event risks.
AUD/USD
The AUD/USD pair claws back a majority of its early losses, which arrived after the Reserve Bank of Australia’s (RBA) interest rate decision, and rebounds to near 0.7085, following Governor Michele Bullock’s press conference.
In the policy decision, the RBA announced a back-to-back hike of 25 basis points (bps), as expected, with a tight majority, and pushed the Official Cash Rate (OCR) higher to 4.1%. Five out of nine members-led committee favored an interest rate hike, which signaled investors that the recent surge in global inflation expectations amid rising oil prices was the only driving force behind the rate hike decision.
NZD/USD
The NZD/USD pair meets with a fresh supply during the Asian session on Tuesday and erodes a part of the previous day’s solid recovery from the vicinity of a one-month low, touched last week. Spot prices currently trade just below mid-0.5800s and seem vulnerable while below a technically significant 200-day Simple Moving Average (SMA).
USD/CAD
The USD/CAD pair posts modest losses around 1.3685 during the Asian trading hours on Tuesday. The ongoing conflict in the Middle East provides some support to the commodity-linked Canadian Dollar (CAD) against the US Dollar (USD). The US Federal Reserve (Fed) interest rate decision will take center stage later on Wednesday.
USD/CHF
The Swiss Franc (CHF) gains traction against the US Dollar (USD) on Monday as the Greenback edges lower, allowing USD/CHF to pause a four-day winning streak. At the time of writing, USD/CHF trades around 0.7869, easing slightly after touching its highest level since January 22 on Friday.
CRUDE OIL
Oil prices rose more than 2% in early trade on Tuesday, reversing some of the previous session’s losses, on worries about supply with the Strait of Hormuz mostly shut and U.S. allies rebuffing calls to send warships to help tankers move through the vital waterway.
Gold (XAU/USD) sticks to modest intraday gains through the Asian session on Tuesday, though it lacks bullish conviction and remains below the $5,050 level. There are a few signs that the US-Israeli war on Iran is ending soon amid the escalating conflict between Israel and Hezbollah in Lebanon. In fact, the Israeli military said that it is expanding ground assault in southern Lebanon – an area where the militant group Hezbollah is known to hold sway. This keeps geopolitical risks in play and turns out to be a key factor lending some support to the safe-haven precious metal.
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