This week began with a change of market sentiment as EUR, GBP and other risky assets made a significant upside movement with a gap upward. Geopolitical tensions seem as well as US election results are no more in focus as market participants are looking for new drivers. Risky appetites are back as traders and investors start buying EUR, GBP, stocks and others assets, while gold is under pressure.

EUR/USD: An Upside Movement on the Eve of the FOMC Meeting Minutes

According to the recent news, the new US Treasury Secretary will be Scott Bessent. The fund manager is expected to avoid sharp decisions when it comes to tariffs promised by Donald Trump in his election campaign. This added some risky appetites to financial markets as the effect of tariffs may not be as hard as expected. Moreover, there is a possibility of a deal in the Middle East, which stimulated traders and investors to buy risky assets as well. 

The market sentiment shifted on Tuesday morning as Donald Trump announced 25% tariffs on goods and services coming from Mexico and Canada, while imports from China will become 10% more expensive. 

Currently, market focus is on the upcoming FOMC meeting to hear new comments from the Fed officials. The latest views were hawkish with more Fed members voting for a more cautious approach when it comes to interest rates. However, Minneapolis Fed President Neel Kashkari expects the Fed to cut rates during the meeting that will take place in December.

When it comes to technical analysis, the currency pair is in a clear uptrend now as it stays above the SMA50. The RSI indicator moves upwards and is close to the overbought area. On the upside, the closest target is at 1.0600, which it can reach after breaking 1.0530. On the downside, traders can use the SMA50 as the support level.

GBP/USD: Traders Wait for new Signals from the Band of England

The British pound received support similar to other risky assets on the eve of the FOMC meeting minutes. Markets are now waiting for new comments from the Fed members as well as new updates from the Bank of England’s officials. According to the latest news, most BoE policymakers support gradual monetary policy easing to closely monitor price pressures. 

According to Clare Lombardelli, she supports the gradual removal of the monetary policy restriction. She warned about higher inflation risks at the same time. When it comes to economic performance, Clare Lombardelli mentioned that fresh PMIs suggested some slowing the the UK economy. However, she avoids to treat it as a strong signal after a single release.

Technically, GBP/USD is trading above the SMA50, which means that a bullish trend is dominating currently. The RSI indicator is close to the overbought area, which means that a downside correction may take place in the near future. The closest upside target is at 1.2660, but GBP/USD has to break 1.2610 to move there. On the downside, the closest support is at the SMA50.

Bitcoin Steps Back Waiting for New Drivers

Bitcoin failed to reach 100,000 last week and stepped back as market participants are anticipating new drivers to buy it. According to recent updates, Donald Trump is ready to fire the current SEC governor, which may be a supportive factor for BTC. However, it is more likely that Bitcoin will stay in the current range (between 90,000 and 100,000) before the inauguration takes place. 

The upcoming FOMC meeting may also be of particular importance as it will likely to have an impact on USD. Therefore, if the FOMC members rhetoric remains cautious, Bitcoin is likely to develop its downside movement.

When looking at charts, BTC/USD stays below the SMA50, which means that sellers are dominating the market. The RSI indicator is close to the oversold area but failed to move there. The currency pair shows signs of an upside movement that may target the SMA50 in the upcoming hours. On the downside, the next target will be at 89.500. 

XAU/USD: Gold Loses Supporters Due to the Risky Mode On

Appetites for risks that appeared on Monday this week pressed Gold down as the precious metal is no longer in demand. Tensions in the Middle East may be paused with the possible deal between the sides, which allows market participants to look at risky currencies, stocks, and other classes of assets. 

Moreover, risks of tariffs by the US government are also reassessed by market participants, which allows traders and investors to turn their heads towards more interesting assets. 

Technically, gold remains under pressure as it stays below the SMA50. The RSI indicator has recently left the oversold area, which means that we have a correction now. The closest upside target is at the SMA50. When it comes to downside targets, they are now at local lows at 2,610.