Gold slips on renewed trade optimism
The precious metal was seen posting declines on Thursday. The declines came just a day after price rallied. The declines in gold prices came largely due to the renewed trade optimism. President Trump tweeted that a trade deal was close. Various news reports indicate that Washington was ready to cut existing tariffs by half while also cancelling the upcoming tariffs due from December 15th.
The overall price action in gold remains flat. The current range is formed within the horizontal channel of 1480 and 1460. Price action needs to breakout from this range to confirm the next direction. Given the current fundamentals, we expect the bias is shifting to the downside.
If the 1460 support gives way, then gold prices will extend lower to the 1440 handle. Given the fact that this level previously served as resistance, we expect prices to rebound on the first impact. This will potentially create the 1460 and 1440 as the next range.
Oil prices climb on fundamentals
Crude oil prices continue to post a steady rise. The gains come on the back of OPEC’s decision to cut production further. Besides this, the recently weekly EIA inventory report showed that oil inventory rose just 800k. This was against expectations of a decline of over 2.5 million barrels.
The current gains could push oil prices to the resistance level of 60.64. There is scope for prices to rise modestly to the upper end of this resistance area to 63.00. For the moment, minor support is seen at the 58.00 handle.
Therefore, any declines could see this level holding up in the short term. In the event that the support breaks, then price action could post further declines. This will invalidate the upside bias currently taking place.
EURUSD at resistance as ECB keeps rates steady
The euro currency was seen posting declines after a failed intraday attempt to break past the resistance area of 1.1129 – 1.1113. The declines in the euro came about after the ECB held its first meeting under the leadership of Christine Lagarde. No changes were made to the monetary policy including the forward guidance.
If the current momentum continues, then the EURUSD could be seen pushing lower. This will keep the currency pair confined to its range. The lower support at 1.1100 will likely hold the currency pair from falling further.
A breakout from this range is required for the EURUSD to have some sense of direction. The currency pair has been trading within this level for the past few months. With the resistance level now holding up, there is scope for prices to fall back lower.