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Gold prices unsettled by trade- and OPEC-related optimism Gold prices struggled to challenge the 100-DMA earlier this week, which continues to serve as the key barrier on the way to the $1,500 psychological level. On Friday, the precious metal shows a bearish bias but stays positive in the weekly charts. Market sentiment has improved today, which caps the safe-haven gold demand amid investor optimism surrounding the potential trade deal and OPEC+ gathering. Both China and the US continue to signal further progress towards a phase one deal. Still, there are no any details on the tariffs, which dents the upside in risky assets. Meanwhile, OPEC+ countries are discussing output cuts by additional 500,000 barrels per day, along with extension of the existing deal, which is positive for the oil market and high-yielders in general. Against this backdrop, the dollar sees the downside pressure against major rivals, which in turn curbs the bearish bias in gold prices. In the short term, the yellow metal will likely remain under pressure amid market optimism. But the bullion may yet jump to the recent highs around $1,485 should the trade uncertainty reemerge any time soon. When and if the US and China strike an interim deal, gold could come under the selling pressure though.
TVC:GOLD
by HelenRush
AUDUSD corrects lower, 0.68 eyed The aussie turned into a corrective mode on Wednesday, after a rejection from three-week highs around 0.6860 yesterday. The recent two-day rally looks overdone, with profit-taking looking fairly attractive and reasonable at current levels, considering the prevailing risk-off sentiment in the global financial markets. Risk aversion intensified overnight after Trump indicated a possibility of striking a trade deal with China after the 2020 election. Moreover, China vowed to retaliate against the US on Hong Kong and Xinjiang bills and highlighted that it will not set any timeline or deadline for trade deal with the United States. Against this backdrop, risky assets including the Australian dollar came under the selling pressure. AUDUSD has been challenging the 100-DMA and looks set to test the 0.68 figure as traders have already digested yesterday’s RBA decision to keep rate on hold. The pair received a boost from the central bank’s meeting as monetary authorities showed commitment to keep its cash rate on hold and assess the effect of previous cuts. Now, the additional downside pressure comes from the domestic economic data. The Australian economy expanded by a less-than-expected 0.4% in the third quarter, with the annual figure came in at 1.7%. Despite the result improved from the previous quarter's 10-year low, growth remained below trend.
by HelenRush
Oil hinges on OPEC+ verdict Crude oil prices struggle to shift into a recovery mode on Tuesday after a rejection from the $62 region at the start of the week. Brent has been flirting with the $61 handle, where the 100-DMA lies. The futures struggle for direction despite a modest bullish bias amid a heightened uncertainty on the trade front and ahead of the OPEC+ meeting due later this week. The cartel and its allies are widely expected to extend the deal and the question is if the producers will show a willingness to reduce crude output more aggressively as us shale oil production hit another all-time high last month. So far, there are no clear signs of a consensus on this issue among the alliance members, which makes oil traders nervous these days. In the short term, market participants will focus on the US industry data out of the United States. Should the API report point to a decline in crude oil inventories, Brent could gain marginally but in general, market reaction to the release will likely be rather muted and short-lived as investors are preparing for the crucial OPEC+ meeting, with the outcome of this event will set the tone for the market in the medium term. Technically, Brent needs to hold above the $60.30 area in the near term, with the immediate important target comes around the $62 handle. Depending on the verdict of OPEC countries, prices could easily get back below the $60 level should the alliance disappoint.
TVC:UKOIL
by HelenRush
Gold struggles for a clear direction After a rally on Friday, gold prices are back under the selling pressure as risk sentiment has improved at the start of the trading week. Positive data out of China eased investor concerns over the state of the world’s second largest economy and fueled risk appetite across the board. China official manufacturing PMI came in at 50.2 in November up from 49.3 in October, to hit the highest level since March. However, this optimism could wane quickly if there is no progress on the US-China trade front. So, the downside risks for the previous metal still look limited at this stage as risk aversion could reemerge at any moment, especially amid the speculations that the two countries may postpone the phase one deal into 2020 due to a number of issues that have yet to be resolved. As such, gold could regain the $1,465 figure should investor sentiment deteriorate again, with the $1,450 area will continue to serve as a meaningful support for the market. In the short-term charts, the technical picture looks bearish, with prices need to get back above the 100-SMA just below $1,463 in the 4-hour timeframes to shrug off the selling pressure. Otherwise, the metal may challenge last week’s lows below $1,450, where some bids could limit the downside impetus. As there is high uncertainty on the trade front as well as ahead of the crucial OPEC+ meeting, gold will likely remain directionless in the days to come and the intraday volatility nay stay elevated.
TVC:GOLD
by HelenRush
EURUSD bears struggle to break 1.10 In a muted Black Friday session, EURUSD remain stuck in a tight range, oscillating around the 1.10 key support since the start of the week. The liquidity is fairly low due to holidays in the United States, and many traders have already left the markets on Wednesday, suggesting the consolidation will continue until the end of the day. Despite the bearish bias prevails in the EURUSD pair, the euro bears struggle to push the prices below the mentioned hurdle. On the positive side, Eurozone inflation data came in a tad higher than expected in November, the official preliminary data showed. The core CPI rose to 1.3% versus +1.2% y/y expected. In theory, the report points to a slight rebound in inflation pressures. But the question is can the momentum keep rising next year. In other words, to derive a substantial support from this indicator, the common currency needs to see a more convincing sustainable rise in inflation. Technically, the pair needs to hold above the 1.10 level in the short term. Otherwise, the euro will slide to the 1.0990 support zone. A break below this barrier could open the way towards the 1.0930 region. For now, the 1.0990 continues to hold the downside pressure. On the upside, the initial bullish target comes around 1.1030.
by HelenRush
USDJPY rally stalls amid trade war escalation The USDJPY soared to highest since May on Wednesday amid a broad-based rally in risky assets fueled by positive comments from the trade front. The greenback rallied to 109.60 but the bulls were stirred by the 100- and 200-SMAs in the weekly charts. Early on Thursday, the pair shifted into a correction mode as risk appetite wanes across the board. Still, the prices stay above the 109.00 handle and remains decently higher in the weekly timeframes. The sentiment in the global markets turned sour after Trump signed two US bills supporting Hong Kong's pro-democracy protesters. In turn, China foreign ministry said that the bills to be met with strong countermeasures. So far, there are no details on how Beijing may retaliate but it still looks like Trump’s signing of the bills will not derail a phase one trade deal, otherwise financial markets will see an aggressive sell-off across the board. For now, risk aversion is fairly moderate, which is seen in a subdued demand for the yen and gold. Depending on further developments, USDJPY may get back below the 109.00 handle should investor sentiment deteriorate further. On the downside, the 200-DMA at 108.90 now serves as the immediate support. As long as the pair remains above this area, bearish risks are limited. Of note, US markets are closed today in observance of Thanksgiving. As such, the volatility could pick up during the day amid thin trading volumes.
by HelenRush
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Oil struggles to make gains despite trade optimism Crude oil prices shifted into a consolidation mode on Wednesday after a local rebound yesterday. Brent has settled above the $63 handle but has yet to confirm a breakout as the upside momentum looks unsustainable fragile. In the daily charts, the futures remain stuck between the 100- and 200-DMAs. Oil market remains sensitive to trade-related headlines, with Trump’s positive comments on a so-called phase one deal providing some support to prices. On the other hand, as market dynamics shows, traders remain cautious. Also, the API data cap further bullish attempts, with the report showing a build in inventories by 3.6 million barrels last week. Now, traders are looking forward the official EIA report which could push Brent north should the results come in better than the private estimate. In a wider picture, further direction in Brent still hinges on trade developments. As the December 15 tariff deadline looms, markets want to see a concrete progress in negotiations and striking a partial deal between the two countries. Otherwise, oil prices along with other risky assets could suffer decent losses amid concerns over the outlook for the global economy. In the short term, Brent needs to regain the $63.50 area in order to confirm a break above $63.
TVC:UKOIL
by HelenRush
Gold remains in a downtrend channel but may trim losses Gold prices dipped to two-week lows on Tuesday after four days of losses. The bullion received support around the $1,451 level and bounced slightly, as investor optimism seems to be waning early in Europe. In the weekly charts, the picture remains bearish amid the lingering hopes for striking a so-called interim trade deal between the US and China. Also, some negative pressure on the yellow metal came from Fed’s Powell speech on Monday. The central bank governor pointed to a favorable outlook on the US economy, suggesting the monetary authorities will leave rates on hold for the time being. As a reminder, gold demand picks up when rates are lower. The precious metal remains within the downtrend channel and shows little signs of a breakout, mainly amid rising chances for a trade deal between the world’s two largest economies. In recent developments, trade negotiators from the US and China held another phone call this morning and reached consensus on how to resolve related problems. In a knee jerk reaction, investors cheered the reports but the optimism has waned quite quickly due to a lack of details. Now, markets need to see the concrete progress on this front to stay afloat. Otherwise, some profit taking could follow which would benefit gold prices. Should risk sentiment continue to deteriorate in the short term, the bullion may regain the $1,462 area.
TVC:GOLD
by HelenRush
Further ascent in USDJPY under question After two weeks of declines, USDJPY makes bullish attempts at the start of a new trading week. The pair is now back around the 200-DMA which continues to serve as the immediate resistance zone, coming around 109.00. Dollar demand picked up amid the renewed trade optimism after China said it will raise penalties on violations of intellectual property rights. As this issue is one of the sticking points in trade talks with the US, investors took this decision as a step towards a potential trade truce between the two countries. It remains to be seen how Trump will react to this step from Beijing, and positive signals from Washington could further boost risk sentiment in the short term. In this scenario, USDJPY may extend gains but to show a decisive break above the mentioned moving average, the pair needs to receive a clear positive message from the United States. Otherwise, the trade uncertainty could cap investor bullishness and bring back the safe-haven demand for the Japanese yen. Also, market focus will son shift to Fed’s Powell testimony. Should the Federal Reserve governor express a dovish tone, the greenback will come under pressure across the board, which will cap the upside bias in the pair.
by HelenRush
Oil needs to confirm a breakout Brent crude extends gains for a third day in a row. Prices registered two-month highs around the $64 handle and tries not to lose the upside momentum after some consolidation during the Asian session on Friday. Now, the immediate hurdle for the market comes at the 200-DMA around $64.30. The rally was fueled by positive comments from China. The government officials confirmed that the two countries remain in close contact and the talks are set to continue. This helped to ease market concerns over a phase one deal as mid-December tariffs looming. Also, oil traders cheered the reports that OPEC+ countries may deliver deeper production cuts next month in order to support the market. Against this backdrop, Brent turned positive in the weekly charts and showed a spectacular recovery from recent lows. Nevertheless, the prices still remain stuck between the 100- and 200-DMAs and need a firm break above the latter to confirm a bullish breakthrough. Otherwise, a partial profit taking could follow and take the futures back below $62.40. In the near term, prices will continue to react to trade-related headlines and further positive comments from this front may help traders to push the barrel above $64.
TVC:UKOIL
by HelenRush
Gold could regain upside momentum due to trade troubles Gold prices registered two-week highs above the $1,478 on Wednesday but failed to preserve gains and turned slightly negative on the day. The intraday volatility pickup in the market was due to mixed signals from the trade front which remains in market focus. On the positive side, Trump said that they continue the trade talks with China and Beijing wants to make a deal, with White House representatives highlighted that negotiations are continuing and progress is being made on the text of the phase-one agreement. But there were also reports that the deal may not be completed this year, which caused a slight wave of risk aversion on Wall Street and lifted gold prices off daily lows. Against the rising trade uncertainty, the precious metal could stage a more substantial ascent in the near term should investors receive a confirmation of the talks about a delay in the partial deal. The longer the markets wait, the more nervous the investors become. In this context, the bullion may receive a boost if risk off sentiment intensifies any time soon. As such, the yellow metal could finally regain the 100-DMA which serves as the key local resistance for the last two weeks. Once above this moving average that now comes just below the $1,481 figure, the prices may retarget the $1,500 psychological level.
TVC:GOLD
by HelenRush
EURUSD still capped by the 100-DMA The EURUSD pair failed to break above the 100-DMA on several occasions and stays below this line since early-October. After four days of gains, the euro resumed the decline on Wednesday, though the downside pressure looks limited so far. Dollar demand picked up slightly as risk sentiment turned sour after Trump threatened once again to hike tariffs against China next month should the two countries fail strike a partial trade deal by that time. In fact, there was nothing new in this warning but it served as a reminder for investors about a tight position of the US President in his trade spat with Beijing. The subsequent safe-haven demand triggered a local rise in the greenback against high-yielding counterparts. As a result, EURUSD slipped back to the levels just above the 1.1050 intermediate support. At the same time, dollar demand remains limited as traders switched into a wait-and-see mode ahead of the FOMC meeting minutes due later today. Should the central bank disappoint the USD bulls by its dovish tone, the euro could regain strength in the near term. However, it will hardly be enough to make a clear break above the mentioned moving averages which now comes around 1.1090.
by HelenRush
Oil prices remain vulnerable amid trade uncertainty Crude oil prices failed to preserve gains and got back below the $63 handle. On Tuesday, Brent tries to hold above $62 and struggles to resume the ascent amid the lingering trade uncertainty. Moreover, the market remains vulnerable to further losses despite the futures are holding above the 100-DMA these days. China expressed pessimism over a partial trade deal with the United States, which spooked investors and triggered risk aversion overnight. The lack of concrete progress in the negotiations between the world’s two largest economies unnerves oil traders amid the ongoing concerns over global oil demand due to further signs that the long-standing trading dispute hurts the global economy. Against this backdrop, Brent could extend the decline in the short term should Washington and Beijing fail to deliver positive updates on their discussions any time soon. Additionally, the market feels the pressure from OPEC which shows little willingness to take additional steps to support the still unbalanced market. Besides, the US shale production continues to rise along with building inventories, which aggravates investor worries about the oversupplied market globally. As such, despite the current neutral dynamics, downside risks for Brent still prevail, at least in the short term.
TVC:UKOIL
by HelenRush
Trade optimism hurts the dollar, FOMC minutes eyed The greenback is lower against its major counterparts on Monday, as positive risk sentiment amid renewed trade optimism caps the safe-haven demand for the US currency. Over the weekend, China and US officials held phone talks and discussed the final details of the first phase of a trade deal. The news fueled investor optimism at the start of the trading week but lack of details and the remaining issue of tariffs removal cap the positive sentiment. Against this backdrop, EURUSD extends the recovery from lows below 1.10, eyeing the 100-DMA marginally below the 1.11 handle, while the immediate resistance comes around 1.1070. Despite the ongoing rally, the common currency remains vulnerable at this stage, as dollar demand could reemerge should risk sentiment turn sour. In this context, further developments on the trade front will remain in focus. As for other events, the FOMC meeting minutes will attract market attention this week. It will be interesting to see the tone the Federal Reserve could strike amid contradictory economic signals from the US economy and the remaining uncertainty around the trade negotiations despite some progress towards a partial deal. Should the US central bank express a less dovish rhetoric on economy and monetary policy, the greenback may rally across the high-yielding currencies. In this scenario, EURUSD could lose the recovery momentum and reverse a part of recent gains.
by HelenRush
USD could extend the rally Dollar demand seems to be reemerging, with major currencies retreating marginally on Friday. However, the trading activity has been muted amid the lingering trade uncertainty and ahead of key economic updates out of the Eurozone and the United States. At that, US-China trade developments remain on traders’ radars. The European CPI data could set a short-term direction for the EURUSD pair but US retail sales report will be the key event for USD pairs in general. Should the data exceed forecasts, the release will confirm the latest statements from the Federal Reserve Governor Powell, who pointed to a strong economic activity earlier this week. If so, the dollar could appreciate along with stocks as strong numbers would cool Fed rate cut bets after the central bank lowered rates in late-October for the third time this year. In this scenario, EURUSD could get back below the 1.10 handle and challenge the 1.0990 level, with the next support lying around 1.0970. The technical picture for the common currency will improve in case of a recovery above 1.1055. In the weekly charts, the pair is trading flat after steep losses during the previous week.
by HelenRush
Gold rebounds from three-month lows, further gains may lie ahead Gold prices extend modest gains for a third day in a row, after reaching a three-month low of $1,445.50 earlier in the week. Spot gold has encountered a local resistance around $1,477, which is standing on the way to the 100-DMA. The short-term technical picture has improved somehow after a bounce, but the precious metal remains vulnerable to further losses as long as the prices remain below the $1,500 psychological level. Despite the recent talks about a so-called phase one deal between the US and China, uncertainty persists on the trade front. Moreover, there are now reports that trade talks have hit a snag over farm purchases, which coupled with the recent contradictory Trump’s comments on tariffs and China raises the risk of another escalation in the long-standing trade dispute between the world’s two largest economies. As dynamics in gold prices shows, a negative trade-related scenario has not been priced in by gold traders, so there is a possibility that the yellow metal could resume the rally should the two countries fail to deliver good news any time soon. In this scenario, the bullion may regain the above mentioned moving average and target the $1,500 handle im the medium term.
TVC:GOLD
by HelenRush
Markets shift focus from Trump to CPI and Powell On Tuesday, Trump disappointed investors, threatening China with substantial tariffs if the two sides fail to strike a trade deal. The US President said the trade deal with China is close but didn’t deliver any details on the possible agreement. Such rhetoric fueled risk aversion on Wednesday, with dollar demand seems to be picking up ahead of the European session. EURUSD is trading at the 1.10 psychological support which can be broken in the short term on a combination of USD demand and the prevailing risk aversion un the global financial markets. The bearish pressure will increase if the US CPI data surprise to the upside and Powell’s tone in today’s speech comes as less dovish than expected. Also, the Eurozone industrial production data could affect the pair in the near term. Once below 1.10, EURUSD could reach 1.0990 and then target the 1.0970 area. But should the common currency see a positive scenario, the 1.10 handle will serve as a decent support. The pair could be rejected from this level and proceed to a recovery if the greenback comes under the selling pressure. However, this scenario looks less likely, with downside risks still prevailing for the euro.
by HelenRush
EURUSD remains bearish, still threatens 1.10 Despite a modest bounce seen at the start of the week, EURUSD remains in a bearish mode and needs to stage far more decent gains to feel more comfortable. The pair suffered aggressive losses last week and still licks its wounds not far from the 1.10 handle, which remains at risk. In the short term, the common currency will pay attention ZEW survey out of Eurozone and Germany. Should the results come in line with expectations, the pair will hardly show a significant reaction as traders will focus on the upcoming Trump’s speech at the New York Economic Club. Investors hope that the US leader will give more clear signals on the trade talks with China. His remarks will set the tone for all asset classes and could bring the additional volatility to the markets in the short term, especially after the latest contradictory signals from the trade front. The technical picture shows that the euro remains vulnerable to further losses at least in the short term and could get back below the 1.10 handle should risk aversion reemerge any time soon. On the upside, once above the 100-DMA at 1.11, the downside risks will abate. In the weekly charts, an important resistance comes around 1.1180.
by HelenRush
Brent needs to hold above the 100-DMA On Friday, Brent managed to recover from weekly lows around $60.65 and finished at $62.65. However, as the market sentiment has deteriorated again, the prices slipped back below the $62 handle and threaten the 100-DMA again at the start of the trading week. Risk aversion in the global financial markets is due to the spreading protests in Hong Kong along with contradictory signals from the trade front. On Sunday, Trump said he has not agreed to lift China tariffs, which spook investors and fueled risk aversion across the board. Now, traders shifted into a wait-and-see mode, which caps the upside attempts in the market. Meanwhile, Baker Hughes data showed a third straight week of decline in the number of active US rigs drilling for oil by 7 to 684 last week. Despite another positive report, traders were unfazed by the report, partly due to the fact that the declining number of oil rig count doesn’t translate into declining production in the country which remains at record volumes. Technically, Brent needs to stay above the 100-DMA in the short term in order to regain the $62 handle and refrain from further losses. The upside potential will depend on the news from the trade front which continue to set the tone for risky assets in general.
TVC:UKOIL
by HelenRush
Global rally hits gold prices Gold prices continue to trade under the selling pressure as investors cheer positive trade headlines this week. The bullion barely held above the key $1,460 handle which was briefly pierced in early October and turned into a support level during the first week of August. Progress in the US-China trade negotiations is the key bearish driver for the precious metal and this is the major downside risk for prices at this stage. The latest sell-off in gold came as Chinese commerce ministry announced that is has agreed with Washington on removing the existing tariffs. On the other hand, the euphoria in the global financial markets looks overdone as neither side specifies any details or timetables, which brings some uncertainty. From this perspective, the recent sell-off in the yellow metal may have been too aggressive, which means the recovery could be fairly rapid should risk sentiment wane any time soon. In the weekly charts, gold is set for the biggest weekly drop since May 2017. On Friday, the bullion makes some bullish attempts but downside risks still prevail, especially as the prices remains below the 200-DMA around $1,476, which is the immediate target for gold bulls.
TVC:GOLD
by HelenRush
Cable on the back foot ahead of BoE’s “Super Thursday” After rejection from the 1.2975 local highs last week, GBPUSD remains on the defensive, now threatening the 1.28 figure. The uncertainty on the US-China preliminary trade deal coupled with stronger dollar are capping the bullish attempts in the pound early on Thursday. At the same time, recent reports that China commerce ministry is ready to negotiate on how much tariffs can be cancelled will ease the downside pressure on high-yielding assets including sterling. Also, traders are getting more cautious ahead of the so-called Bank of England’s “Super Thursday”. The central bank is widely expected to leave rates on hold, with traders wondering if the monetary authorities drop its hawkish bias. In this context, the focus will be on the quarterly inflation forecast and Mark Carney’s tone. Despite the threat of a no-deal Brexit has abated, the regulator could express concerns amid low inflation and risks for the economy. hould the bank of England abandon its hawkish bias, the GBPUSD pair could accelerate the decline and get back below the 1.28 handle, with the initial bearish target coming at 1.2785. the key support lies around the 200-DMA which lies around the 1.27 handle. However, the potential selling pressure could be limited as the central bank is unlikely to strike an explicit dovish tone.
by HelenRush
Oil capped by lack of progress in trade talks Brent crude gained 1.35% on Tuesday and registered fresh late-September highs above the $63 handle. Oil prices saw three days of gains in a row amid a widespread optimism over a possible US-China trade deal. However, as the positive momentum in risky assets wanes due to a lack of fresh signals from the trade front, Brent struggles to extend the rally as well. Also, traders were disappointed by a bearish API report which pointed to a rise in crude oil inventories by over 4 million barrels. Now, market participants, fearing negative data from EIA due later today, are shifting to a partial profit taking. However, the downside impetus is fairly limited so far, and the $62.50 area serves as a local support zone. In the short term, oil prices dynamics will depend on the general risk sentiment in the global financial markets which seems to be turning sour amid a lack of further progress towards a partial trade deal. As such, there is a risk of losing ground in the oil market – Brent could get back below the 100-DMA around $61.50 should the prices fail to make a clear break above the $63 handle. In the weekly charts, oil looks neutral as long as Brent is stuck between the 100- and 200-SMAs. To improve the technical picture, the futures need to confirm a sustained trading above the $60 psychological handle.
TVC:UKOIL
by HelenRush
Gold struggles amid trade optimism Hopes that Washington and Beijing will manage to strike at least a partial trade deal fueled risk-on sentiment across the board in the global financial markets. As a result, safe-haven gold failed to extend the rally initiated in the second half of last week. The bullion registered local highs just below $1,516 on Friday and retreated back to the levels marginally above the key $1,500 psychological handle. Both China and the US expressed confidence in striking a phase one deal, with Washington considering rolling back tariffs on $112 billion in Chinese goods and expecting Beijing will make similar concessions. Against this backdrop, major global indices continue to post records, anticipating a final deal at some point. In turn, a widespread optimism caps the upside attempts in gold prices at this stage. Nevertheless, should the two sides fail to give some fresh positive signals in the near term, the optimism could fade gradually. In this context, the bullion may receive some boost after a local retreat. Also, gold may trim losses if the upcoming US service PMIs come in worse than expected. Should the prices fail to stay above the $1,500 level in the near term, the immediate support will come around $1,495 and then at $1,491.
by HelenRush
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