Subdued Trading Amid Lack Of Fresh Fundamentals
ORBEX | Oct 23, 2019 06:05AM ET
Trading was rather subdued amid a lack of any fundamentals or major global themes.
The Brexit saga continues , but the impact is limited to the pound sterling.
Data from the U.S. was mostly second-tier. The Richmond Fed manufacturing index rose to 8, beating estimates of -7. This was a strong rebound from -9 previously.
Euro on the Backfoot Amid USD Strength
The euro weakened amid a broader strength in the dollar.
The USD index, however, made only modest gains. This comes a day after the dollar closed flat.
Economic data was sparse, on both the US and eurozone front.
EURUSD Declines for a Second Consecutive Day
Price action in the currency pair saw a decline for a second consecutive day. The declines come after the euro rose to two-month high.
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The declines in the EURUSD correspond with the hidden bearish divergence on the daily chart. Thus, there is scope for the currency pair to fall toward the lower support. The first support is at the 1.1075 – 1.1062 level.
China Raises Crude Oil Import Quotas
In positive news for crude oil China lifted the quotas on crude oil imports. The lifting of the quotas means that China can now import an additional 12.9 million tonnes of crude oil this year.
The import of the crude oil quotas for China stands at 153.1 million tonnes to date. Oil prices did not react much to the news.
Can WTI Break the Technical Resistance?
The commodity was once again testing the resistance area of the 54.71 – 54.35 region. This marks a second retest of the resistance level.
A convincing breakout above this resistance level will see the upside momentum building up. A successful breakout will confirm the upside in WTI crude oil towards 57.64 level.
Gold Prices Maintain Weak Trend
Gold prices maintained the weak trend with price action largely subdued. The muted price action comes amid a rise in global equities.
Traders are still trading off the positive developments in the US-China trade talks . But, given the fluidity of the situation, anything can happen. A lack of economic data on Tuesday was also partly responsible for flat trading.
XAUUSD Testing the Lower Trend line
The precious metal was testing the lower trend line on Tuesday. But, price action is weak while testing the rising trend line. A strong downside breakout in gold could signal a move lower.
The support at 1445 remains the likely downside target. Gold prices have been trending somewhat lower after testing the highs of 1550 recently.
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