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Gold at one-month highs amid risk aversion Gold prices rallied decently yesterday, with the bullion broke above the 100-DMA, which acts as a support level around $1,297 on Tuesday as the bullish momentum is waning. The prices extended gains to one-month highs above $1,300 but failed to confirm a bullish breakthrough and started to retreat. The bullion is closely following investor sentiment in the context of the ongoing US-China trade war. Investors were spooked by retaliation from China yesterday despite the move was expected after Trump imposed additional tariffs for Chinese exports. On Tuesday, however, the risk sentiment has improved marginally after the US President said he expects that further trade negotiations to be successful. Despite some relief, investors will remain cautious in the coming weeks as chances for striking a trade deal have declined after the latest escalation in tensions between the world’s two largest economies. As such, the precious metal will likely stay afloat at this stage as the trade war could get worse before it gets better. In the short term, the bullion needs to hold above the $1,290 area in order to make another bullish attempt at $1,300.
TVC:GOLD
by HelenRush
USDJPY extends gains amid trade war escalation After a brief recovery on Friday, USDJPY resumed the downside move at the start of a new trading week as Asian markets suffered early week losses. Late last week, the pair dipped to early-February lows marginally below the 109.50 area and remains in the lower part of the trading range, threatening the lows. Trump’s aggressive rhetoric towards China spooked investors as well as Beijing’s promise to retaliate. In this conditions, the safe-haven yen outperforms and could extend the rally despite some overbought conditions that emerged after a break below the 110.00 level. As long as the prices remain below this figure, the pair is bearish and may come under additional selling pressure if the 109.40 region is broken. In this case, the 108.80 support will come into focus. Once above 110.00, USDJPY will target the 110.30 level. At the moment, the downside risks prevail for the greenback.
by HelenRush
Oil prices struggle for direction Crude oil prices saw a directional trade yesterday. Brent remains highly volatile these days as traders are nervously monitoring the news on the US-China trade talks. On Friday, the futures are making further bullish attempts above $71 but still struggle to overcome this level as uncertainty persists. Overnight, US has hiked tariffs on $200 billion of Chinese goods to 25% from 10%, escalating the trade war between the two world’s largest economies. At the same time, the negotiations are set to continue today and investors still hope to see a breakthrough in relations. Besides, the oil market is awaiting a fresh weekly report from Baker Hughes. Last week, the number of active rigs drilling for oil rose by 2 to 807 following a drop of 20 oil rigs in the previous week. Further recovery in the rigs could cap the upside potential in prices in the short term. Technically, Brent needs to see a sustainable break above $71, which is necessary for some improvement in the near-term outlook. On the other hand, as long as prices stay above the 200-DMA around $69, the selling pressure is limited.
OANDA:BCOUSD
by HelenRush
USDJPY at fresh three-month lows on risk aversion Against the backdrop of widespread risk aversion that drives global markets lower this week, USDJPY has aggressively weakened farther below the 110.00 handle to fresh three-month lows around 109.60 on Thursday. Yesterday, Trump further toughened his stance toward China, threatening to prolong his trade war with Beijing, which signaled that it was prepared to fight back. Such an atmosphere between the two countries suggests we may not see any progress in negotiations that resume today. As such, despite the fundamental picture doesn’t support for much more losses, the pair could get even lower should the risk sentiment fail to improve in the short term. The technical outlook for the greenback has deteriorated further after a break below the 110.00 threshold, with the pair suffered a slide through some technical support levels. The next support comes around 109.40 while on the upside, the pair needs to at least regain the 110.00 figure.
by HelenRush
Gold benefits from trade tensions Gold prices are rising this week as concerns over the US-China trade relations fueled safe-haven demand in the global markets. On Wednesday, the bullion extended gains to mid-April highs marginally below the $1,290 handle and could make further bullish attempts if trade tensions continue to rise. US-China trade talks will resume in Washington tomorrow. After the latest Trump’s threats, investor optimism on further progress in negotiations towards a deal has been waning. At the same time, it looks like the markets haven’t yet fully prices in the potential breakdown in talks without a deal. For the yellow metal, is means that the prices could see further gains in case of a negative scenario.  Technically, gold needs to break above the 100-DMA around $1,295 in order to target the $1,300 psychological level. Recovery above this resistance is needed to brighten the mid-term technical outlook for the precious metal. On the downside, the immediate support now comes at $1,280.
TVC:GOLD
by HelenRush
Trump fuels oil market volatility Brent crude saw a very volatile trading on Monday with markets were digesting the unexpected US-China trade war escalation after Trump threatened to tighten tariffs on Chinese exports. The announcement triggered a massive sell-off in the global markets, including oil. Investor sentiment has stabilized since then but some caution still prevails, which caps the upside potential in Brent. After a brief dip below the $70 handle, the futures recovered above $71 but failed to challenge the $72 barrier and turned lower on Tuesday. On the one hand, buyers’ enthusiasm was dampened by Trump’s threats, fueling concerns over oil demand in China. On the other hand, the market is still supported by expectations of a decline in global supplies due to US sanctions against Iran and Venezuela. Technically, Brent needs to hold above the 200-DMA that lies marginally above the $69 handle. Otherwise, the short-term outlook will deteriorate. On the upside, prices need to regain the $71 level at least but it could be difficult should US-China tensions continue to rise.
OANDA:BCOUSD
by HelenRush
USDJPY falls victim to safe-haven demand The USDJPY pair dropped dramatically on Monday after a plunge late last week, witnesses amid a widespread dollar selling following mixed labor market data from the US. The prices extended losses to late-March lows around 110.30 earlier in the day and has settled marginally below 112.00 since then. The latest plunge in the pair was due to a fresh wave of safe-haven demand after Trump threatened tariff hike on China imports. Signs of escalation in the US-China trade war sent global markets lower and fueled demand for the Japanese yen as a result. Until recently, investors hoped that the US and China were getting closer to the deal, so the fresh Trump’s tweet on Sunday came as a surprise and disappointment for markets. In this context, despite some local recovery, USDJPY will likely remain under pressure in the short term as traders continue to closely monitor developments on the trade front. Further signs of escalation may send the pair even lower, with the next support in case of a break below 111.30 comes at 111.00.
by HelenRush
EURUSD unfazed by strong inflation data Extending the post-FOMC retracement from nearly two-week highs, EURUSD struggles to regain the upside momentum for a third day in a row on Friday. The pair failed to confirm a break above 1.12 and retreated to the 1.1150 area which is under threat now. Interestingly, the euro remains under pressure despite better-than-expected European inflation data. According to the preliminary estimates, the euro zone headline CPI rose by 1.7 y/y in April as compares to 1.4% in the previous month while the so-called core CPI edged higher to 1.2% from 0.8% in March. The common currency failed to take advantage from the report as the dollar demand remains elevated ahead of the key US jobs report due later today. Strong figures could send the greenback even higher and thus increase the selling pressure on EURUSD in the short term. The immediate support after a break below the 1.1150 area comes at 1.1110. On the upside, the euro needs to regain the 1.12 handle to see a better short-term technical picture.
by HelenRush
Brent: the broader bullish trend remains intact Crude oil prices managed to strike a third day of gains yesterday but failed to keep the upside momentum and turned lower today as traders are digesting the latest report from the US. According to the EIA data, US crude stockpiles last week jumped by nearly 10 million barrels to 470.6 million barrels, to their highest since September 2017. Meanwhile, production hit a record high of 12.3 million barrels per day. The numbers are fueling fears that stockpiles will continue to rise in the coming weeks as the US refineries are preparing for the traditional maintenance period. On the other hand, further decline in exports from Iran and Venezuela as well as the rising prospects of extending production cuts by OPEC+ in June will likely cap the selling pressure in the market. Brent slipped below the $72 handle but still holds above the $71 support. A break below this level could worsen the short-term technical outlook in the market while the broader bullish trend remains intact.
OANDA:BCOUSD
by HelenRush
Gold fails to gain on dollar weakness Despite a widespread dollar weakness gold prices are struggling to regain a sustainable bullish impetus on Wednesday after a modest recovery yesterday. The bullion failed to break above the $1,286 intermediate resistance that is standing on the way to $1,290 and has settled above $1,280 during the latest trading. It looks like the dollar relationship has fallen apart, at least in the short term, as the precious metal fails to derive support from a sell-off in the greenback. In part, gold is trading lower against the backdrop of firming equities, with trading conditions are thin today as many markets are closed for a public holiday. Investors shrugged off the latest weak Chinese business surveys and turned into a bullish mode after Trump agreed with Democratic leaders to spend $2 trillion on infrastructure. The additional pressure on safe-haven metal comes from the latest round of US-China trade talks, with US Treasury Secretary Steven Mnuchin described the negotiations as productive and said the two countries will continue their talks in Washington next week. Hopes for resolving the trade dispute will likely further support riskier assets and cap the bullish attempts in gold prices. In the short-term, however, the yellow metal could turn positive if the Fed’s dovish tone puts the greenback under additional selling pressure.
TVC:GOLD
by HelenRush
Oil lacks momentum Crude oil prices are making further recovery attempts on Tuesday, after a steep decline late last week. Brent has regained the $71 figure and now targets the $72 barrier but it looks like the market lacks the upside momentum despite the prevailing bullish bias. The mixed dynamics in crude prices is due to emerging concerns over OPEC production increase which coupled with rising output from the United States would offset most of the shortfall expected from US sanctions on Iran. Saudi oil minister Khalid Al-Falih said today that his country won't exceed its OPEC+ deal output limit and also signaled that OPEC+ deal to the end of the year extension is possible. It sounds somehow reassuring but the big question remains Russia’s position on the deal, which makes traders nervious as well. Against this backdrop, the upside potential for Brent will likely remain capped by the mentioned concerns, while in general, the fundamentals continue to point to a tightening market amid the supply cuts from Iran, Venezuela and Libya.
OANDA:BCOUSD
by HelenRush
Gold surge helped by US GDP The rebound in gold prices accelerated on Friday as Treasury yields and the dollar fell on US GDP data. The precious metal saw the largest daily gain in nearly two months and registered a mid-April high above $1,288 after three days of gains. The headline GDP number was really good, with the US economy unexpectedly grew 3.2% versus 2.3% expected. But the details of the report were not so rosy as much of the spectacular rise was due to inventories and trade, while private consumption cooled for a third consecutive quarter. As traders assessed the details of the report, the greenback came under a widespread pressure, which played into the bullion’s hands. However, the yellow metal turned negative on Monday as dollar steadied and stocks recovered. In the days to come, gold could go lower if risk-on sentiment is encouraged by further progress in the US-China trade talks, and the Federal Reserve confirm its commitment to the dovish stance during the upcoming to-day meeting that concludes on Wednesday. Technically, the bullion needs to hold above the $1,270 area in order to avoid a more aggressive selling pressure in the short term.
TVC:GOLD
by HelenRush
USDJPY has a bullish chance After a false technical break above the 1.12 handle, the dollar came under pressure against the Japanese yen on Thursday and registered decent intraday losses. Today, the pair is making some recovery attempts but the impetus looks unconvincing and too timid, at least so far. Some selling pressure on the yen came from the economic front. According to the preliminary data, industrial production in Japan was down 0.9 percent in March, the fastest pace in five years. On a yearly basis, industrial production sank 4.6 percent following the 1.1 percent drop in the previous month. The figures suggest that the country’s economy may post a mild contraction in the first quarter. USDJPY has recovered above the 200-DMA around 111.50 but struggles to get back above the 112.00 level. Further on, the dollar direction will depend on the US Q1 GDP data due later today. Should the numbers surprise to the upside, the greenback will resume the widespread rally. In this scenario, the pair may climb above 112.00 and challenge the 112.20 region.
by HelenRush
Oil market still focused on Iran After a short-term pause and failed corrective attempts on Wednesday, Brent crude resumed the rally today, with prices refreshed early-November highs at $74.55. The market continues to derive support from the “Iranian factor” after the United States said early this week it would end all exemptions for sanctions against the Middle Eastern country. The EIA report yesterday was bearish, with US crude oil production has risen to a record of 12.2 million bpd again, while crude oil stockpiles hit an October 2017 high of 460.63 million barrels. However, the negative market reaction was rather subdued and short-lived, which confirms that traders are still focused on the Iranian sanctions and their potential consequences on the supply side. In the short term, Brent will likely stay elevated and could even extend the rally as concerns over supply glut persist, especially after Saudi Arabia signaled it won’t ramp up crude oil production any time soon despite the end of sanction waivers for all Iranian oil customers.
OANDA:BCOUSD
by HelenRush
EURUSD mired in dismal data EURUSD slipped decently yesterday and challenged the 1.12 support for the first time in three weeks. It was mainly on rising dollar amid waning concerns over the state of the US economy after stronger-than-expected home sales data. On Wednesday, the common currency remains under pressure and continues to challenge the 1.12 area. Fresh euro zone data added to the negative sentiment around the pair. After yesterday’s dismal consumer confidence report, German IFO came in below expectations in all of its components for April, confirming the ongoing slowdown in the region’s largest economy. Business climate index decreased to 99.2 from 99.6, the current assessment dropped to 103.2 from 103.8 while business expectations declined to 95.2 from 95.6. In other news, the ECB said in its monthly economic bulletin that the immediate impact of US car tariffs would be small. This highlights that the monetary authorities aren’t too concerned by the prospects of tariffs, at least for now. The comments brought some relief to the single currency but the overall bearish pressure still persists, and the current dynamics shows the 1.12 handle remains at risk.
by HelenRush
Gold needs to hold above $1,270 Gold prices extend losses for a third week in a row. Last week, the precious metal failed to hold above the 100-DMA after a break below the $1,300 handle and remains under the selling pressure since then. As a result, the prices are oscillating around 2019 lows, threatening the $1,270 figure. The metal failed to derive support from the news that the US will end Iran sanctions waivers, while oil prices spiked to fresh November highs on Tuesday. The dollar demand is also muted though it doesn’t help the bullion either. Risk sentiment looks mixed at the moment, with investors are slowly resuming activity after the Easter holiday. So there are no any significant incentives for gold from this front as well. In general, the undermined appeal of the non-interest-bearing gold will keep the prices under pressure in the near term. The upside correction may take place now if risk aversion arrives at the global financial markets. In the current environment, the yellow metal needs to hold above the $1,270 area in order to avoid a more aggressive decline.
TVC:GOLD
by HelenRush
The US sends oil prices higher After four week of gains in a row, crude oil prices spiked on Monday, with Brent registered fresh November highs at $73.65. Since the early rally, prices have settled around the $73 handle and remain elevated as traders are digesting news from the US. The latest surge was fueled by reports that the US is set to end sanction waivers on the eight countries which import crude oil from Iran within the sanctions reimposed in November, after Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Further drop in Iranian exports would continue to squeeze supply in a market which is already tightened due to the U.S. sanctions on Iran and Venezuela, unrests in Libya and Nigeria, as well as OPEC+ efforts. Should Washington officially confirm the latest reports on Iran, Brent could jump even higher, on expectations of even tighter global supply, while some unexpected twists in the statement may send the futures lower amid profit-taking.
OANDA:BCOUSD
by HelenRush
USDJPY stuck in a range on quiet trading USDJPY flat on Friday and little changed on the weekly charts as trading activity is muted on Good Friday/Easter holiday. The pair made some bullish attempts above the 112.00 handle earlier this week but failed to show a sustained momentum amid the unstable risk sentiment. The yen ignored better-than expected Japanese CPI figures. March national consumer price index matched expectations of 0.5% increase versus 0.2% earlier, while national CPI ex-fresh food rose to 0.8% from 0.7%. The Japanese currency was also indifferent to the Bank of Japan’s routine bond market operation. From a technical perspective, the pair needs to hold above the 111.75 intermediate support in order to regain the 112.00 level afterwards. In a wider picture, the downside risks for the greenback are limited as long as the prices are holding above the 200-DMA around 111.50. On the upside, the 2019 high, registered earlier this week, comes at 112.16. USDJPY could challenge this area should risk rally resume, which is unlikely in the short term due to holiday trading.
by HelenRush
EURUSD shows its sensitivity After earlier bullish attempts, the EURUSD pair turned sharply lower on Thursday. The prices failed to break above the 1.13 once again and plunged to nearly one-week lows around 1.1260. The aggressive sell-off was due to fresh data from Germany that disappointed traders. Germany April flash manufacturing PMI came in at 44.5 versus 45.0 expected and 44.1 prior. Services PMI was at 55.6 versus 55.0 expected and 55.4 in March. Meanwhile, the composite PMI came in at 52.1 versus 51.7 expected and 51.4 prior. In fact, the report was not so bad, and market reaction looks overdone as the manufacturing reading haven’t disappointed and improved to that of March. The upside potential for the pair looks limited at this stage as risk sentiment seems to be deteriorating now. Interestingly, investors generally ignored the reports from Chinese officials who said that there has been new progress in negotiating text of trade deal with US. This is in part due to the fact progress towards a deal but is already largely priced in by markets. In the short term, the 1.13 handle remains in focus and still acts as a resistance area. Only a firm break above this barrier will open the way for more sustained gains towards 1.1325 and higher.
by HelenRush
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EURUSD clings to 1.13 EURUSD failed to hold above 1.13 yesterday and finished in the negative territory amid a widespread rally in the greenback despite weak US industrial production data. However, the pair resumed the upside move on Wednesday as dollar turned bearish due to a better risk sentiment in the global financial markets. Investors are cheering stronger-than-expected Chinese data. The world’s second-largest economy expanded by 6.4 percent in the first quarter, faster than the 6.3 percent forecast by economists. The result helped to ease concerns over the global economy and pushed higher riskier assets including the common currency. Interestingly, against this backdrop, the euro ignored the reports that the German government is on course to cut its growth forecasts for 2019 to only 0.5%. It looks like traders are ready for such a move which has been priced in already. In the short term, EURUSD needs to confirm a break above the 1.13 barrier and challenge the 1.1330 intermediate resistance in order to extend the rally. Otherwise, another wave of profit-taking could emerge if risk sentiment deteriorates.
by HelenRush
Gold struggles amid a progress in trade talks Gold is bleeding for a fourth day in a row, with the prices dipped below the 100-DMA again and registered a daily low around $1,283 so far. The bullion was rejected from highs above $1,310 last week and has been trending lower since then. Global financial markets look undecided on risk appetite but US-China trade optimism reduces the safe-haven appeal of the precious metal after US Treasury Secretary Steven Mnuchin said that talks were progressing well and the two countries might be “close to the final round” of their trade negotiations. Also, Japan and the U.S. started the first round of trade negotiations in Washington yesterday, which adds to the bullish pressure on global stocks. Against this backdrop, the bullion struggles to benefit from a weaker dollar. Technically, gold needs to stay above the $1,280 figure in order to avoid a more aggressive sell-off. Only above the $1,300 barrier, the short-term technical outlook will improve somehow.
TVC:GOLD
by HelenRush
Oil market monitors geopolitics and risk trends Crude oil prices are losing ground on Monday, coming off from the five-month highs registered last week below $72 amid the ongoing unrest in Libya. The supply cuts from OPEC, US sanctions against Iran and Venezuela, as well as the fighting in Libya are fueling expectations of tightened global supplies these days. Against this backdrop, the market looks strong and ready for another rally should the situation in Libya deteriorates in the near term. Another bullish factor for Brent is further progress in the US-China trade relations. On Sunday, the US Treasury Secretary Steven Mnuchin said that a US-China trade agreement would go “way beyond” previous efforts to open China’s markets to U.S. companies. He also expressed hopes that the two sides were “close to the final round” of negotiations. Technically, Brent looks overbought at this stage as the prices faced another psychological resistance around the $72 barrier. On the other hand, a daily close above the $71 handle will cap the downside pressure, while further dynamics in prices will depend on geopolitics and risk sentiment across the global markets.
OANDA:BCOUSD
by HelenRush