There were signs of disappointment as the US and China trade deal soured following comments from the Treasury secretary.
Steve Mnuchin said that, in case of a no-deal in the trade talks, the US will hike tariffs by mid-December.
However, he did mention that he expects that the two sides will manage to strike a deal.
The comments come after President Trump announced that a phase one deal was in place. China is expected to buy up to $50 billion worth of agricultural goods from the US.
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Eurozone Industrial Production Rises 0.4%
Industrial production in the Eurozone rose by 0.4% on the month in August. The increase came after two months of declines.
The data for August offset the 0.4% decline from July. The data also beat estimates of a 0.3% increase. Industrial production fell across all sectors except intermediate and capital goods.
EURUSD Continues to Consolidate at 1.1030
The common currency consolidated near the price level of the 1.1030 region. There is scope for an upside towards the 1.1091 level.
The upside gains will see EURUSD testing this level in the near term. But given the mixed bias, there is scope for the euro to slip lower. The downside support area of 1.0944 could be tested on a bearish decline.
Brexit Talks Continue Ahead of EU Summit
Brexit talks continue to progress after the EU official Michel Barnier said that there were significant gaps.
The UK said that it was prepared to give concessions to the EU on the Irish backstop arrangement. A UK spokesman said that while talks were constructive, there was still a lot of work to do.
GBPUSD Remains Volatile
GBPUSD initially gave up its gains. Price action fell back to test the support area of 1.2533. As long as this support holds, GBPUSD could rise back higher.
The upside bias remains at the resistance level of 1.2895. The bias will shift in case GBPUSD breaks below the support of 1.2533.
Gold Prices Gain on Rising Risk Appetite
Gold prices rose slightly higher on Monday as risk appetite fell on US and China trade news.
China’s export data to the US showed a 22% decline in September on a year over year basis.
Total exports were down 3.2% on the month. Imports to China were down 8.5%. The risk appetite led to some modest gains in the precious metal.
XAUUSD Remains Rangebound
Gold crept back into range, trading within the 1508 – 1485 level. The reversal came after prices initially slipped below this level two weeks ago.
With price action going back within that same level, we expect the sideways range to continue. On the weekly charts, the bearish engulfing pattern remains, which gives a downside bias to gold.