Lukman Otunuga
ForexTime (FXTM)
Global equity markets struggled for direction during Wednesday’s trading session, with investors on the fence as activity continued to decelerate ahead of the upcoming Christmas holiday break.
Asian shares concluded on a mixed note on Wednesday as anticipation mounted ahead of a final vote on the US tax bill. In Europe, shares were lacklustre amid the limited appetite for risk and this could trickle back into Wall Street this afternoon. With global equity bulls and bears likely to be missing in action as the holiday mood kicks in, stock markets could remain subdued this week.
Sterling steady ahead of Carney testimony
Sterling nudged higher against the Dollar on Wednesday morning as market players awaited Bank of England Governor Mark Carney‘s appearance before Parliament.
Carney and Co. are scheduled to testify in front of Parliament’s Treasury Select Committee this afternoon on the latest Financial Stability Report (FSR). With UK inflation rising to its highest level in almost six years and the uncertainty surrounding Brexit still weighing on sentiment, we could see some action in today’s Parliamentary hearing. A heated discussion between Carney and the treasury committee over Brexit-related risks could punish the British Pound.
Taking a look at the technical picture, the GBPUSD edged higher on the daily charts with prices trading around 1.3380 as of writing. An intraday breakdown below 1.3350 could encourage a further decline towards 1.3300 and 1.3230, respectively. Alternatively, a breakout above 1.3440 may trigger a further incline towards 1.3520.
Commodity spotlight – Gold
Gold ventured higher during Wednesday’s trading session with prices challenging $1267 amid a softer US Dollar.
With the recent market excitement from US tax reforms dwindling away and economic calendar relatively light, Gold could be driven by price action today. From a technical standpoint, the yellow metal remains somewhat bearish on the daily charts despite the impressive appreciation witnessed this week. The yellow metal is currently in the process of a technical bounce with firm resistance found at $1267. If prices fail to secure a daily close above $1267, then Gold may decline back towards $1250. Alternatively, a breakout above $1267 opens the gates back towards $1280.
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