Forex Today: Focus Shifts to Midterms and Jobs Data

Caution has kept the US Dollar (USD) within a fluctuating range on Tuesday, reflecting the broader mood across the FX market. Traders remain wary ahead of the US Midterm elections and key US economic releases, with uncertainty over the Middle East crisis also persisting.

A modest gain on the day has seen the US Dollar Index (DXY) reverse the previous day’s retreat, although trading remains confined to a consolidation range just below the key 102.00 barrier. The November 4 calendar includes the regular MBA Mortgage Applications release, followed by the ADP Employment Change report, Balance of Trade figures, the final S&P Global Services PMI, the ISM Services PMI and the EIA’s weekly US crude oil inventories report.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A decisive break above the key 1.1200 barrier continues to elude EUR/USD despite a slight gain. On the data calendar, the final S&P Global Services PMI readings for the EMU and Germany precede the euro bloc’s preliminary Inflation Rate release.

Tuesday has seen GBP/USD recover territory above 1.3400 as its multi-day rally continues. The UK calendar has just one release scheduled: the final S&P Global Services PMI.

Fresh multi-day highs have brought USD/JPY close to its key 200-day SMA around 158.60. Japan’s Monetary Base figures are the next scheduled domestic release.

The RBA’s rate hike has failed to generate fresh bullish momentum in AUD/USD, leaving the pair under renewed heavy selling pressure and back near two-week lows around 0.6960. Australia’s Household Spending figures are due next.

Speculation over a possible diplomatic resolution to the US-Iran conflict has weighed further on front-month WTI futures (December contract), bringing prices closer to $93.00 per barrel.

Renewed weakness in Gold has taken prices through $3,900 per troy ounce once more, giving back part of Monday’s rally. Persistent expectations of further Fed rate hikes, alongside mounting caution ahead of the US Midterm elections results, have driven the precious metal’s decline.