All Eyes On Buenos Aires' G20 Summit
FX Recommends | Nov 30, 2018 08:34AM ET
The greenback is still looking undermined by The Fed Chief Powell's comment that interest rates are just below a range of estimates of the so-called neutral level.
As most of the markets participants have seen that a signal of pausing later after reaching neutral stance by raising the Fed fund rate by 0.25% more to 2.5% next FOMC meeting on next Dec. 19.
His comment has given support to the equities market which was depressed by his earlier remark this month that "equity volatility is only one of many factors that the Fed takes into account".
His comment sent UST 10-year yield down further to be close to 3% in the same time it gave the gold excuse to for trading currently to $1225 per ounce, after it has been undermined by the Fed's vice-chair Clarida's hint that he would back more rate hikes if inflation goes up and the gradual rate hikes remain appropriate.
The oil prices also could stave off their slide and WTI could return for trading close to $51.50 per barrel, after finding support near $49.50 waiting for materialized decision by OPEC and its allied countries to cut their daily production by 1.1m barrels a day, when they meet in Vienna on 6th of next month.
There is clear conviction among these oil exporting countries to cut production, but the markets need to know to which degree Russia will be agreed to cut its production and also Saudi Arabia after its daily production rose to records close to 11m bpd in the recent months according to Bloomberg, showing actual readiness to offset any Iranian cap of supplies.
There will be scheduled meeting at the G-20 Summit this weekend in Buenos Aires between Russia’s Vladimir Putin and Saudi Arabia’s Mohammed bin Salman and the markets will be waiting for any remarks about the oil production from these 2 leaders.
While Trump is still looking for lower prices, as he tweeted last week praising the Saudi action to raise its production recently, after imposing sanctions he named the "toughest ever" to cap the Iranian oil exports, excluding 8 countries for 6 months earlier on the 5th of this month.
While the markets will be waiting ahead for also his meeting with the Chinese leader Xi Jinping in Buenos Aires with rising hopes for reaching a deal to reduce the trade tensions, after their phone calling in the beginning of this month.
However Trump has not stopped threatening the Chinese during this month indicting that he is ready to raise the tariffs of their goods, unless they can strike a deal on revised terms of trade.
The IMF has preceded that meeting by a report saying that the situation has only worsened since the fund trimmed its world GDP forecast last month to 3.7% from 3.9% it expected last April.
XAU/USD Daily Chart:
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The gold rose from trading now near $1225 per ounce, After it could show this week ability to hold a place above its daily SMA50 and its daily SMA100 by rebounding from $1211.24 per ounce.
XAU/USD is trading now in its ninth day of being above its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today $1205.
The daily chart of XAU/USD shows that its RSI-14 is inside its neutral area reading 52.721.
XAU/USD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line inside its neutral territory reading 66.691 and leading to the upside the signal line which is lower in the same region at 48.942, After positive crossover inside the neutral region by stepping on $1211.24 per ounce.
Important levels: Daily SMA50 @ $1215, Daily SMA100 @ $1210 and Daily SMA200 @ $1258
The Closest Experienced S&R:
S1: $1211.24
S2: $1195.75
S3: $1180.76
R1: $1243.40
R2: $1265.93
R3: $1272.88
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