Daily Briefing- Forex & Commodities In Focus

EUR/USD – Bounces Off After Inflation Report

The demand for the European currency continues firm at the inception of the week, raising EUR/USD to new daily highs in the 1.1690 zone. The index proceeds to gain from Friday’s pullback, climbing up after reaching solid contention in the 1.1620 areas.

 

Fundamentally, the downside risk from concerns regarding Italian fiscal sustainability now appears much more near term. However, the investors still believe the relative-rate support for the USD versus the EUR concurrently with the lingering trade war can cause a bearish pressure on the EUR/USD currency pair.

 

EUR/USD – Technical Levels
R3: 1.1858
R2: 1.1756
R1: 1.169
Key Trading Level: 1.1655
S1: 1.1588
S2: 1.1554
S3: 1.1452

GBP/USD – Goes For a Bullish Ride

Fundamentally, the European Union and Britain yet have a task to do to resolve a range of matters in Brexit negotiations including bypassing a “hard” border in Ireland, the EU stated before its negotiator Michel Barnier briefs ministers from member states.

The GBP/USD remains bullish at this point as long as it holds the 1.3135 support level. Rebound from 1.3135 could extend the Cable higher to 1.3190. However, the bearish breakout of 1.3135 can cause a drop up to 1.3100.

GBP/USD – Technical Levels
R3: 1.3266
R2: 1.3178
R1: 1.3124
Key Trading Level: 1.309
S1: 1.3036
S2: 1.3002
S3: 1.2915

 

USD/JPY – Ascending Triangle Pattern

The USD/JPY is pointing little change in the Monday session. At the moment, the pair is trading at 111.97, depressed 0.08% on the day. In economic headlines, it’s a modest inception to the week. The U.S Empire State Manufacturing Index sank piercingly from 25.6 to 19.0 points. This missed the forecast of 23.2 and was the weakest figure in five months.

For now, the monthly Bank of Japan rate meeting is awaited which is coming out on Tuesday. But it’s not expected to cause any major move in the market. As policymakers are foreseen to keep the short-term interest rate target at -0.1% and a promise to guide long-term rates near 0%.

 

USD/JPY – Technical Levels
R3: 112.83
R2: 112.41
R1: 112.24
Key Trading Level: 112
S1: 111.82
S2: 111.58
S3: 111.16

Gold Jumps above $1200 – Weaker Dollar In Play

Gold has begun the week with heavy gains. In Monday’s North American business, the spot rate for one ounce of gold is $1202.93, up 0.74% on the day. In the U.S, a key manufacturing report failed to surprise the market. The Empire State Manufacturing Index fell sharply, dropping from 25.6 to 19.0 points, causing a weakness in the dollar and bringing bulls for the gold.

Is the US-China trade war about to open a new stage? The world’s two biggest economies have now exchanged tariffs, and President Trump has frightened to piercingly up the ante and force tariffs of some $200 billion on China which is also causing a sort of haven appeal in the market. The greenback remains under pressure in the absence of economic catalysts. That’s why we are seeing a bullish trend in gold.

 

For the moment, the precious metal is heading north towards the major resistance level of 1208. On the 2 – hour chart, you can see it’s a triple top pattern and historically pattern is known for the bearish reversals.

 

Gold  – Technical Levels
R3: 1230.09
R2: 1214.21
R1: 1203.9
Key Trading Level: 1198.33
S1: 1188.02
S2: 1182.45
S3: 1166.57