The dollar maintains firm tone against a basket of major currencies, trading near fresh highs on Wednesday. The US Dollar Index is trading around $96.00 after posting fresh two-months high at $96.38 on Tuesday.
The greenback rallied on positive recent US data and renewed risk sentiment, with additional support coming from hawkish comments of Fed’s member Lacker, who said that there was a strong case for raising interest rates.
On the other side, British pound remains the top loser of past couple of sessions. Sterling bears accelerated further on Wednesday, after Tuesday’s strong fall that broke and close below former critical support, post-Brexit low at 1.2795.
Fresh weakness took the pound below 1.2700 support against the dollar, as fears about ‘hard Brexit’ that would restrict Britain’s access to EU’s single market and could cost the country around 38 billion pounds, intensifies.
The pound hit fresh lows of 31 year, with number of analysts operating with 1.2500 / 1.2000 levels that could be reached in the near-future, while those with more aggressive approach already talk about parity level. The last attempt at 1.000 support was in 1985.
The Euro is the only of major currencies holding positive tone on Wednesday and holding above 1.1200 handle, after Tuesday’s fall to 1.1136 low and subsequent sharp recovery that was triggered by comments about potential changes in ECB’s policy. The European Central Bank signalled gradual reduction of its bond-buying programme, worth 80 billion Euros, before ending QE programme.
The US dollar was little changed against yen on Wednesday but maintain firm tone. Fresh attempts above three-week high, posted on Tuesday, would trigger extension towards next target at 103.34, possibly to key barrier at 104.30.
Australian dollar remains in red for the second day and came ticks ahead of strong support at 0.7588 against its US counterpart, after short breather, provided by better-than-expected Australian Retail Sales data. Recovery rally was capped 0.7624, with fresh weakness pressuring strong technical support at 0.7600 zone.
Spot gold was among top losers on Tuesday, as it fell 3.3% and hit fresh over three-month low at $1266. Yesterday’s fall marks the biggest one-day loss since September 2013.
The yellow metal trades within narrow consolidation on Wednesday, with negative near-term outlook.
Strong dollar and comments about ECB’s possible tapering bond purchases sooner than expected, prompted investors’ strong exodus from Gold positions.
Global stocks were also hit by ECB comments. Wall Street ended lower on Tuesday, while Asian shares retreated after initial losses and European stocks are at the back foot in Early Wednesday, after strong rally on Tuesday.
Highlights of the day

Europe
Services PMI data from Eurozone countries and the UK, are in focus of European session.
Forecasts for September’s Services PMI are generally unchanged from August, however, overall better-than-expected Manufacturing PMI data from two days ago signal possible surprise.

UK Services PMI is one of key releases on Wednesday. Forecast for September lies at 52.0 vs August release at 52.9, however, upbeat releases of UK Manufacturing PMI on Monday and Construction PMI on Tuesday, maintain hopes of potential strong reading of Services PMI today.
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America
US ADP Non-Farm Employment data for September are one of top releases of America’s session. The private employment report is used as indication for US Non-Farm Payrolls report, due on Friday.
Forecast for September is at 166K vs 177K in August and data is due at 12:15 GMT.
US ISM non-Manufacturing PMI data are forecasted at 53.1 in September, well above 51.9 release in August and due at 14:00 GMT.
Important levels
GOLD
Gold is trading within narrow consolidation on Wednesday, after sharp fall on Tuesday that hit fresh low at $1266. The yellow metal met its target at $1267, with extended wave C, capable of travelling to its next targets at $1260 and $1249.Initial resistance lies at $1275, followed by $1284 and strong $1295 barrier, where extended bounces should find solid resistance.
GBPUSD
Cable hit new 31-year low at 1.2683 on fresh bearish acceleration, after the pair closed below former critical support at 1.2795. Bears eye next targets at 1.2647 and 1.2520.
Initial resistance lies at 1.2743, which guards 1.2795, now reverted to strong resistance.
EURUSD
The pair trades above 1.1200 handle following yesterday’s fall to 1.1138 and subsequent quick recovery that signalled repeated downside rejection in three days. Initial support at 1.1200 holds for now, guarding 1.1167, then 1.1152/38 spike lows and key 1.1122 support zone.
At the upside, immediate resistance lies at 1.1225, ahead of 1.1250 and key 1.280 resistance zone., Market Analysis