Reports from Washington revealed that the US and China are close to agreeing to a trade deal.
This comes after Washington reportedly eased its demands by giving industrial subsidies and focusing more on technology and IP protection.
On the economic front, the NY Fed’s Empire state manufacturing came in at 10.1 after easing to 3.7 in March.
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Euro Muted as EU Willing to Negotiate with the US on Trade
The euro currency rose to intraday highs of 1.1320 before giving up the gains to close flat on the day. EU officials signaled their willingness to negotiate with the US on trade talks. The move comes after threats from Washington about raising tariffs on import of goods from the EU. By some estimates, the EU and the US trade amount to close to 30% of the global trade.
Can the EURUSD Continue the Uptrend?
The common currency has been steadily rising over the past few sessions. Price action currently remains within reach of the 1.1330 target in the short term. Support is seen at 1.1276. A retest of the support could set price action to rebound and maintain the upward momentum. Above 1.1300, we expect the EURUSD to test the 1.1400 handle.
British Pound Awaits Labor Market Data
The pound sterling has shifted to a holding pattern as the Brexit headlines fade into the background. Focus will be shifting back to the economic data and the response from the Bank of England. The monthly labor market data will be coming out today. Average earnings are forecast to rise by 3.5% while the unemployment rate is forecast to hold steady at 3.9%.
Will GBP/USD Breakout Higher?
The currency pair has been trading a bit weaker after resistance formed at 1.3108. Price action has formed a series of higher highs, suggesting an ascending triangle pattern. A breakout from the resistance level will trigger further gains with the minimum upside seen at 1.3183.
1285 Support for Gold Proves Tough to Break
Gold prices continue their descent as price briefly broke past the support level of 1285. However, towards the close of business on Monday, the precious metal retraced the losses. The declines in gold come amid talks of US and China nearing a trade deal. This could push risk appetite higher. The S&P500 index has been inching ever closer to push to new all-time highs, underpinning the bullish sentiment.
Will XAUUSD Be Able to Break theSupport?
At the time of writing, XAUUSD prices are once again attempting to test the support level at 1285. However, unless there is a strong breakout from this level, we expect consolidation to continue. Given that the support level has held up so many times in the past, we expect this level to eventually weaken. To the upside, any gains are likely to stall near 1290.25.
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