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Currencies consolidate ahead of the FOMC

During the Wednesday Asia-Pac session, European equities traded lower as the number of infections from COVID-19 continued to grow significantly in France and Germany and across the continent as a whole. French authorities are considering putting Paris into another lockdown to curb further spreading of the disease.

France and Italy are waiting on a report from the European Medicines Agency (EMA) with regards to the continued use of the Oxford-AstraZeneca vaccine but may have to go the route of the UK government which sees the benefits outweighing the negatives.

At the time of writing the DAX traded just off the recent highs at 14570 and still looks very bullish whilst it trades above the Ichimoku cloud on the H4 chart.

The FTSE 100 is testing a double top swing high price level which if it could break above would then open up late 2020 highs to be tested. Looking at the price action the UK100 is bullish and following the momentum of other major indices.

The French CAC 40 is trending higher on the H4 chart whilst it remains within the channel and above the 200 periods Exponential Moving Average (EMA). Any further troubles around the Covid-19 situation that is developing in France, could limit any further rises in the Fra40 asset.

The EURUSD is trading in a sideways consolidation ahead of tonight’s FOMC but is showing signs that it could test the lows of yesterday around 1.1880.

The British pound sterling is gaining ground against the US dollar and is strengthening probably due to the weakening EURGBP as we head into the London session. Cable has been very bullish and is hugging the rising trend line on the daily chart. It will take some very bullish news out of the US to reverse this course as the UK is ahead of the rest of the world in terms of the vaccination rollout.

US API data show that crude inventories fell by 1 million barrels in the week ending March 12, 2021. As a positive for the price of Oil we also saw that gasoline stockpiles in the US declined by 926,000 million barrels during the same week, while the country's distillate reserves rose by 904,000 million barrels. This could be indicating that domestic travel is on the rise as states open up from lockdown. Though Air travel and diesel usage are still at depressed levels. The Daily oil chart is showing how bullish the contract has been this year and that $66.70 is proving to be a tough resistance level to get through.

Markets are trading mixed so far for Wednesday ahead of the United States Federal Reserve's interest rate decision set to be announced later in the day. There are also worries around the rising COVID-19 pandemic story in China, Europe, and Brazil with the added uncertainty caused by rhetoric from the Biden administration towards China. Washington is imposing more sanctions targeting Beijing officials and will be looking to sanction Russia and Iran over intelligence reports suggesting the two countries meddled in the US Presidential election last year.


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