The US dollar was seen rising strongly on Wednesday. The gains came after price turned flat the day before.
Economic data remains sparse, and a lack of any new developments in the trade war also helped to improve risk appetite. However, today’s revised GDP figures will provide a catalyst for investors. The second-quarter GDP is expected to be revised lower to 2.0% from the 2.1% initially reported.
German Gfk Consumer Climate Slows
The Gfk consumer climate report from Germany showed that the consumer sector pointed to a slowdown. The data comes amid a stretch of weak economic reports from Germany. Earlier this week, reports showed that German GDP contracted 0.1% in the second quarter of the year. European indices were trading weaker on the data.
EURUSD Continues to Extend Declines
The currency pair has been seen extending declines. This confirms the downside bias after the EURUSD failed to clear the resistance area at 1.1140. The downside is likely to stall near the previously formed lows of 1.1065. A breakout below this level will probably see further declines lower.
Sterling Falls as the Queen Agrees to Suspend Parliament
The pound sterling was in for a shock yesterday falling over 1% on the day. The currency fell as PM Johnson said that he would ask the Queen to suspend the British Parliament for a month leading up to Brexit. Later in the evening, news broke that the Queen approved the suspension of the parliament. This raises the prospects that the UK could be leaving the EU without a Brexit deal in hand. The sterling erased gains made from the previous days earlier in the week.
GBPUSD Upside Prevails
Despite the declines, GBPUSD looks bullish to the upside. The currency pair fell to the support area of 1.2170 and is promptly pushing higher. However, it will have to break past the previously established highs of 1.2295. A breakout above this level is required for the currency pair to push higher. In the near term, however, watch for GBPUSD to make a firm retest of the support area at 1.2170 ahead of further gains.
Gold Holds Firm Near the Top
The precious metal hovered near the top end of the rally, despite posting a modest intraday low. Gold now remains close to a six-year high. Trade tensions and uncertainty across various economies keep the safe-haven asset in demand. While there has been some improvement in the equity markets, gold has managed to hold its ground so far.
XAUUSD Holds Steady
The precious metal has been holding steady near the top. Price action remains muted for the moment. Price is trading within the range that was established on Monday. Any near-term gains need to come only on a breakout above 1544 level. In the near term, the outlook in gold remains to the downside. The initial support at 1508 is likely to be tested.