The forex market traded the risk-on sentiment on the back of the Chinese inflation rate. Chinese CPI data came in a little more robust than anticipated at the consumer level, while factory gate prices continued to weaken. August’s official Consumer Price Index grew 2.8% on the year, above the projected 2.7% growth and rivaling July’s gain. Producer prices shifted 0.8%.
U.S.-China trade strains have yet to be fixed, making it further probable the U.S. economy may enter into a recession.
During the European session, the British Labor market figures remained the center of attraction as that was the only economic event significant enough to shake the Sterling pairs today. Let's take a look and EUR/USD, GBP/USD, and Gold trade plan.
EUR/USD - Bearish Trendline Weights on the Fiber
On Tuesday, the EUR/USD has traded within a tight trading range of 1.1070 - 1.1020. Nevertheless, the volatility is anticipated to pull up as the European Central Bank (ECB) is scheduled to meet this week to determine the minimum bid rate.
On Monday, the EUR/USD tried to make a bullish attempt, but the bullish bias was shortlived. The European Central Bank is expected to keep the minimum bid rate unchanged, which may drive the bearish trend in the EUR/USD.
The fundamentals side is quite light today in terms of data that attain to have a substantial impact on EUR/USD. Industrial production numbers released by France and Italy came in softer than anticipated but mostly failed to have much of an impact on the exchange rate.
EUR/USD - Daily Technical Analysis
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On the technical side, the Fiber has formed a descending triangle pattern. The pattern is extending resistance at 1.1065 along with support at 1.1015.
Downward breakout of 1.1015 can trigger a sharp sell-off until 1.0960 and 1.0940. Whereas, the bullish breakout can lead EUR/USD towards 1.1100.
Leading indicators such as the RSI and Stochastic are holding in the neutral zone, which is suggesting a sideways trend in the EURUSD.
EUR/USD - Technical Levels
Support Resistance
1.1012 1.1049
1.0997 1.1072
1.096 1.111
Pivot Point 1.1035
EUR/USD - Daily Trade Sentiment
The market is trading sideways as most of the traders awaits for the ECB meeting on Thursday. The EUR/USD is likely to present a bearish trend below 1.1065 and bullish above1.1010.
GBP/USD - Bearish Trendline Breakout, Bulls Loom!
The British Pound pruned earlier winnings on Tuesday as traders did profit-taking after a rally boosted the U.K. currency to six-week highs at 1.2385. Today, most of the bullish trend got triggered after the release of better than expected labor market figures.
As per Office for National Statistics, the British employment rate was calculated at 76.1%; that is the highest on record since 1971.
Moreover, the unemployment rate was forecast to be 3.8%; this is lower than a year beforehand (4.0%) and stable in the quarter.
Well, special gratitude to surprisingly robust figures and concerns that England will not fall out of the European Union without a settlement.
GBP/USD - Daily Technical Analysis
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The Cable is trading bullish after testing a bearish trendline resistance become support level at 1.2240. The GBP/USD has closed a Doji pattern above 1.2240 support area, which is a sign of a bullish reversal.
Besides that, the GBP/USD is heading north overbullish fundamentals, and the immediate target is likely to be around 1.2420.
The RSI is holding in the bullish zone, while the MACD stays under 0, suggesting a bearish bias.
GBP/USD - Technical Levels
Support Resistance
1.2264 1.233
1.2238 1.237
1.2171 1.2436
Pivot Point 1.2304
GBP/USD - Daily Trade Sentiment
I'm expecting a bullish trend in GBP/USD above 1.2300, and this may continue trading bullish until 1.2370 and 1.2410.
Gold - XAU/USD - Risk-Off Sentiment Drive Bears
The precious metal gold was trading in the bullish channel, which has already been demand fades away after stronger than expected inflation data from China.
Chinese CPI data came in a little more robust than anticipated at the consumer level, while factory gate prices continued to weaken. August’s official Consumer Price Index grew 2.8% on the year, above the projected 2.7% growth and rivaling July’s gain. Producer prices shifted 0.8%. Ultimately signaling the world's biggest economy is still not facing recession, added more buyers for the global stock markets, while investors withdraw funds from gold investment.
Gold - XAU/USD - Daily Technical Analysis
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On the technical's side, gold is trading neutral around 1487 trading level as investors are unsure about its direction in the absence of economic events.
As suggested earlier, gold's minor range is $1488.90 to $1566.20. Gold is now testing the 1487 support level and forming a triple bottom on the 4-hour timeframe. The triple bottom signified the importance of a trading level. Therefore, the closing of candles above this level may extend buying until 1510.
On the flip side, the closing of candles below 1,487 can drive further sell-off until 1482.
Gold - XAU/USD - Daily Technical Levels
Support Resistance
1492.58 1510.54
1486.13 1522.05
1468.17 1540.01
Pivot Point 1504.09
XAU/USD -Daily Trade Sentiment
Gold's trade sentiment is choppy for now, which is why I would be looking to take sell positions below 1,504 and bullish areas above 1,487 until both levels are intact.
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