The economic calendar is relatively quiet for today. This comes ahead of a busy week that includes an ECB meeting. The US advance GDP report will also be coming out which will move the markets. Over the weekend, tensions at the Strait of Hormuz and Iran have dented the market sentiment a bit. Besides the trade wars, US and Iran tensions will also keep the market sentiment in check.
Euro Holds Ahead of ECB Meeting
The euro currency was seen erasing the gains on Friday as the currency pair turned flat for the week. The direction in the EURUSD is dictated by both the ECB’s expected policy decisions as well as the Fed. On Friday, the UoM’s consumer sentiment survey showed expectations falling to 98.4 from 98.6 previously. But the EURUSD was muted by and large.
EURUSD to Hold the Sideways Range
The currency pair is expected to remain range-bound in the short term. Price action continues to remain flat as the currency pair hovers between 1.1250 and 1.1188. This flat price action could keep the currency pair waiting for further clues. We expect the sideways range to continue into Wednesday’s ECB meeting.
Crude Oil Attempts a Dead Cat Bounce
Oil prices, which were falling for the most part of the weak eased on Friday. The rebound, however, came on news that US warships had shot down an Iranian drone. Authorities in Tehran brushed aside the news as rumors. However, reports revealed that Tehran seized a British oil tanker in the Straits of Hormuz, escalating tensions with the US.
Can WTI Maintain the Momentum?
After breaking past the support level of 57.50, oil posted a steady decline. However, the reversal came just a few points above the support at 54.42. With the escalating tensions over the week, crude oil could be seen posting a rebound in the near term. The breached support at 57.50 could be tested for resistance.
Gold Retreats off New Six-Year Highs
The precious metal initially rose on an intraday basis to 1452.82, marking a new six-year high. However, the precious metal gave up the gains rather quickly, easing back to the recently breached resistance area. The declines came as investors tried to read the signals ahead of the FOMC meeting due in a week’s time.
Will XAUUSD Reverse Losses?
The XAUUSD reached the upside target of 1450 rather quickly. The reversal was also swift as gold prices settled below the key resistance area of 1431–1428 levels. The last session on Friday closed with a doji. A rebound off this support level could signal whether gold has further upside. Failure to post gains above the resistance area could signal a possible move lower.