By Orbex
The markets opened with a bang on the first trading day of the year.
US equity indices followed their global counterparts. The gains came after President Trump said that he would be signing a trade deal with China on the 15th of January. Following this, negotiations will continue for the second phase of the deal.
Euro Eases Off a 4-Month High
The euro was declining on Thursday as the markets reopened after the holiday week. Economic data on the day saw the manufacturing PMI numbers for December.
Data from IHS Markit showed that manufacturing PMI rose slightly to 46.3 from 45.9 in November, beating estimates.
EURUSD Back at Support
The currency pair’s retreat saw prices retesting the price level of 1.1193 – 1.1177 level. If support is formed here, then we anticipate another leg to the upside. But, if the support fails to hold, then we expect the declines to push lower. EURUSD could be at risk of testing the lower support at 1.1131.
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Sterling Gives Up Gains
The pound sterling is trading lower, giving back most of its gains from the week before. The monthly manufacturing PMI report saw activity rising slightly to 47.5 from 47.4 in November. The data continues to indicate weak sentiment in the UK’s manufacturing sector.
GBPUSD Likely to Stay Range-Bound for the Moment
The currency’s decline will likely see a shift to sideways trading in the near term. With GBPUSD trading within 1.3226 and 1.3100, a breakout from this level is needed.
The bias remains mixed for the moment. However, to the downside, the lower support at 1.2960 will likely come into play. To the upside, GBPUSD will face resistance off 13 Dec highs at 1.3491.
Gold’s Bullish Momentum Holds for Now
The precious metal continued its surge with prices rising to fresh highs of 1527 on an intraday basis. The gains come despite the equity markets rising as well. Positive news reports on the China trade deal also failed to keep prices in check.
XAUUSD Could Come Under Risk of a Correction
The current price action indicates that there is scope for prices to correct lower. To the upside, the rally will be capped at 1534. To the downside, the price level at 1514 will act as initial support. A breakdown below this level will likely push prices lower. The next lower support is at 1483.
By Orbex
