The US Dollar is on a roll, reaching six-month highs as traders anticipate the Federal Reserve's next move. With the government shutdown looming, all eyes are on the ISM Services PMI for a potential market shift.
The Dollar's Dominance: A Controversial Climb?
The USD has been on a bullish streak, pushing towards multi-month peaks. Traders are eagerly awaiting the US Dollar Index's (DXY) performance, which has been on an impressive five-day winning streak. But here's where it gets controversial: the ongoing government shutdown in Washington could impact the Dollar's trajectory.
On Wednesday, November 5, we'll witness a range of economic indicators that could shape the Dollar's future. The weekly MBA Mortgage Applications will set the tone, followed by the ADP Employment Change and the highly anticipated ISM Services PMI.
EUR/USD: Breaking Support Levels
The EUR/USD pair has weakened significantly, dropping below the crucial 1.1500 support level for the first time since August. This move highlights the Euro's vulnerability against the strong Dollar. Germany's Factory Orders and the Services PMI for both Germany and the Eurozone will provide further insights into the Euro's performance.
GBP/USD: Fresh Lows and Selling Pressure
The British Pound continues to face selling pressure, sending GBP/USD to fresh multi-month lows. The final S&P Global Services PMI from across the Channel is expected to offer more clarity on the Pound's trajectory.
USD/JPY: Defensive Trading
USD/JPY traded defensively, retreating from Monday's gains due to a persistent risk-off sentiment. Japan's economic calendar features the Average Cash Earnings and the Reuters Tankan Index, which could impact the Yen's performance.
AUD/USD: Multi-Day Lows
AUD/USD dropped to multi-day lows, with the RBA's steady approach and the strong USD weighing on the Aussie Dollar.
WTI and Gold: Range-Bound and Dropping
WTI crude oil prices remained within a recent range, hovering around $60.00 per barrel. Oversupply concerns and the stronger Greenback have led to decent losses. Gold, on the other hand, dropped significantly, revisiting the $3,930 zone per troy ounce. The stronger USD and reduced expectations of a Fed rate cut have impacted gold prices. Silver prices followed a similar downward trend, breaking below the $47.00 mark per ounce.
And this is the part most people miss: the ISM Services PMI could be a game-changer. It might provide insights into the US economy's health and potentially influence the Fed's next move. So, will the Dollar's dominance continue, or will the ISM Services PMI bring a twist? What do you think? Feel free to share your thoughts and predictions in the comments!
