By Orbex
The US dollar index held strong on Wednesday amid a mixed sentiment in the market. The 10-year Treasury yields hit a fresh 20-month low while equity markets closed in the red.
A number of narratives have kept the risk assets in check across the US, Europe, and the UK. The Bank of Canada held its monetary policy meeting yesterday and left interest rates unchanged as expected
The British pound was down 0.21% on the day. The declines came as the leading Prime ministerial candidate, Boris Johnson, is now required to appear in court. The allegations are that Johnson lied during the run-up to the Brexit referendum, in regards to the comments he made about the UK’s payments to the EU.
After failing to capitalize on the breakout above 1.2716, the GBPUSD currency pair has been gradually extending the declines. Price action briefly fell to the previous four-month low close to 1.2606. We expect a firm retest of this level. In the event of a break down below this support, the GBPUSD could extend the downside momentum further.
Crude oil prices were volatile on Wednesday as price initially tested a two-month low before recovering sharply to close the day flat. The volatility rose as the escalating trade wars are threatening global economic growth. Alongside the trade war narrative, supply concerns due to Venezuela and Iran are also adding to the concerns.
Free Reports:
Crude oil prices slipped back to the support area of 57.50 before posting a strong rebound. Price action remains anchored to the lower end of the support and could trade within the 60.33 and 57.50 handle for the moment. A breakout from this range will ascertain the next leg of the trend in prices. We expect the bias to the upside for a retest of 60.33 to establish resistance.
The precious metal initially rose to an intraday high of 1285 before erasing the gains to close the day flat. The flat price action indicates the mixed sentiment in the market. The trade war with China has reached an impasse despite some hopes that a deal could be made. Meanwhile, Chinese media published dire warnings of retaliation to the US-led measures.
Gold prices posted a reversal after testing the 1285 handle. Price action managed to briefly retrace the initial losses only to fail at the resistance level once again. This led to price pushing lower as a result. Following a successful close below 1277.50, we anticipate the precious metal to fall further in the near term. The lower range at 1270 is likely to be tested by price.
By Orbex