Equity markets are back in the green as risk appetite slowly takes hold. Progress on the US and China trade talks is keeping optimism alive.
China’s Vice Premier Liu He said that he will work with the United States to address each other’s concerns. Liu said that it was in the best interest of both parties to stop the escalation in the trade wars.
Euro Caps 4-day Winning Streak
The common currency closed on Friday, marking a four-day gain. The gains in the common currency came amid a weaker USD. Economic data continues to remain sparse from the eurozone.
On Friday, the current account data saw the surplus widening in August. The surplus rose to 27 billion euro, up from 22 billion from a month ago.
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EURUSD Steady Towards 1.1177 Resistance
The currency pair’s strong bullish momentum is keeping it on track to test the resistance level of 1.1177. The currency pair will likely test this level and bounce off to the downside.
The bearish divergence on the Stochastics hints at a possible reversal. The initial downside comes in at 1.1075 – 1.1062.
Crude Oil Posts Modest Declines
Oil prices edged lower on Friday, closing out with a 0.73% decline on the day. Oil markets continue to be plagued with the build-up in US crude oil inventories.
The rumors about OPEC planning to curb production failed to hold ground. With China’s GDP rising at a slower pace of 6.0%, the global demand for crude oil remains mixed for the moment.
WTI Crude Oil to Consolidate
Oil prices will likely remain within the range of 54.70 – 52.00. This is likely to be a short term bottom that is forming. The falling trend line is breached, but the current declines could see a retest of the breakout level. Only a strong close above 54.70 will confirm further gains.
Gold Turns Flat Despite Dollar Weakness
The precious metal closed flat on Friday. Overall, price action remains subdued. This comes despite the USD turning weaker over the past few sessions. It has been a largely quiet week for the most part. The major news-making headlines were on the back burner. As a result, investor sentiment stayed mixed.
XAUUSD Enters Consolidation
The precious metal is consolidating with the trend lines. This potentially indicates a breakout that is likely to happen. The bias remained mixed at the moment as there scope for a breakout in either direction.
To the downside, the lower support at 1445 will be the initial target. To the upside, the main trend line will have to be breached to aim for gains.