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The US Dollar Index ended Monday’s quiet session unchanged at 102.60. US 10-year yield increased slightly, but it remained below 4%. Wall Street saw increases in stocks, as the Dow Jones hit a new all-time high.
Despite rising yields, gold only slightly increased and fell short of regaining $2,030. XAU/USD is still above the 20-day SMA. After getting close to $24.00, silver began to decline and fell for the second day in a row, closing at roughly $23.80.
EUR/USD rose from the 20-day Simple Moving Average (SMA) and found resistance at 1.0930. The key resistance level remains at the 1.1000 barrier. On Tuesday, Eurozone will publish the final reading of the November Consumer Price Index (CPI).
The Pound struggled on Monday; EUR/GBP rose from below 0.8600 to the 0.8650 area. GBP/USD fell for the second consecutive day, retreating from monthly highs but remaining above the 20-day SMA at 1.2610. UK inflation data is due on Wednesday.
The Bank of Japan will announce its decision on Tuesday. No change in the monetary policy stance is expected. However, the outcome will be closely watched as the market seeks hints about the future of the negative interest rate policy (NIRP), which is anticipated to be phased out next year.
USD/JPY rose for the second day in a row but is sharply lower for December. The pair rose towards 143.00. Volatility is expected to remain elevated ahead of the BoJ decision and considering recent price action.
USD/CAD rose modestly after a three-day sharp decline. The pair has a key support level at 1.3350. The Canadian November Consumer Price Index (CPI) is due to be released on Tuesday. The figures are expected to show annual inflation below 3%, but still above the Bank of Canada’s 2% target.
AUD/USD posted its third consecutive close near 0.6700. The pair is consolidating at monthly highs, still maintaining a bullish bias. The key resistance level is at 0.6730. The Reserve Bank of Australia (RBA) will release the minutes of its latest meeting, with no major surprises expected.
NZD/USD briefly rose to a new multi-month high before retreating. The pair is trading close to 0.6200 and still confronts support at 0.6250. In the immediate term, there is a lateral bias. On Tuesday, New Zealand will make available trade data and the results of the ANZ Business Confidence survey.
The decision on monetary policy made by the Bank of Japan will be the main event of the day. New Zealand will release trade data during the Asian session, while the Reserve Bank of Australia will make available the minutes from its most recent meeting. Canada’s consumer inflation figures will be made public later in the day.
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