By Orbex – 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.
EURUSD 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.
GBPUSD 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.
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XAUUSD 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.
By Orbex
