Equity markets were posting declines for the second consecutive session, following up from Friday’s bearish close. Economic data remains sparse amid talks that the United States and China are close to inking the Phase one of the trade deal. The yearend flows are also likely to blame as investors book profits.
Euro Extends Gains Largely on Dollar Weakness
The euro currency continues to maintain the bullish momentum as the common currency rose to a four-month high. Economic data out of the Eurozone was quiet. The dollar was weakening as investors await further details of the trade deal.
EUR/USD Trend Likely to Shift
The currency pair is currently struggling near the resistance area of 1.1193 – 1.1177 region alongside a confluence with the trend line. We, therefore, expect a retracement if price fails to breakout higher convincingly. Given the thin liquidity in the markets, the euro remains at risk of a move in either direction. But the overall trend is looking up.
Sterling Holds on to Gains
The pound sterling maintained its position firmly as the year comes to an end. Investors will likely focus on the Brexit talks that will dominate the wires into the year ahead. So far, the pound sterling is seen retracing some of the declines.
GBP/USD at Risk of a Correction Lower
The cable is seen trading near the resistance level of 1.3100. However, with the Stochastics on the 4-hour chart signaling a hidden bearish divergence, prices could snap back. A decline will likely see GBPUSD retesting the lower support near 1.2960. But a higher low formation could signal a shift to the upside.
Gold Prices Set to Close out the Year Near Current Highs
Gold investors keep the price of the precious metal well bid near the current highs above 1500 an ounce. There seems to be a bit of a modest risk-on sentiment besides the year-end profit-taking. With equities likely to retreat, gold prices are likely to hold steady into the close of the year.
XAU/USD Steady at 1515 Resistance
The precious metal was seen holding steady near the resistance level of 1515. Given the fact that prices retreated off this level previously, there is scope for a pullback. However, the precious metal is on track to close out the year with gains. Expect further gains if the current 1515 level of resistance gives way.
This market forecast is for general information only. It is not an investment advice or a solution to buy or sell securities.
Authors' opinions do not represent the ones of Orbex and its associates. Terms and Conditions and the Privacy Policy apply.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
AUD/USD trades with mild positive bias near 0.6700, RBA Meeting Minutes eyed
The AUD/USD trades with a mild positive bias near 0.6695 during the early Asian session on Monday. The weaker US Dollar provides some support to the pair. The markets remain unconvinced that the Fed will pivot earlier than previously expected.
EUR/USD gains ground above 1.0850, focus on Fedspeak
The EUR/USD pair trades on a stronger note around 1.0875 on Monday during the early Asian trading hours. The uptick in the major pair is bolstered by the softer Greenback. The Federal Reserve’s Bostic, Barr, Waller, Jefferson, and Mester are scheduled to speak on Monday.
Gold looks to extend uptrend once it confirms $2,400 as support
Gold price continued to push higher last week and rose above $2,400 on Friday, gaining nearly 2% for the week. Investors will continue to scrutinize comments from Fed officials this week and look for fresh hints on the timing of the policy pivot in the minutes of the April 30-May 1 meeting.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.