Equity markets were seen trading flat, a day after rising to fresh highs.
President Trump stated that the US-China trade talks were progressing faster than initially thought. This grew investor appetite for risk.
Economic data on the day saw the Conference Board’s consumer confidence index coming below forecasts. The index fell to 125.9 following a revision for the previous month to 126.3.
Euro Trades Mildly Bullish
The lack of economic data from the eurozone and sparse data from the United States saw the euro lacking direction.
Trading was largely subdued with most of the flows coming out of the US data. A line of big-ticket events today will likely change that.
EURUSD Holds on to Support – Will it Bounce Higher?
The currency pair was seen retesting the support area of 1.1075 – 1.1062. This marks the correction to the downside after price rallied to highs of 1.1177 – 1.1193.
Following this retest of support, we expect the bias to be to the upside. Price action will likely struggle as it approaches the resistance area. All in all, the EURUSD should be confined to the range.
UK Likely to Head for a General Election
The United Kingdom is likely to head for a general election after the opposition Labor party cleared the way. Leading UK indices fell on the news while the sterling did not budge.
The vote, which could take place as early as December, will be pivotal for the country. PM Johnson called for the elections after lawmakers vetoed his Brexit bill to enable the October 31st deadline.
GBPUSD Likely Forming the Upside
The currency pair has been in a holding pattern following the gains. The currency pair rose to highs near 1.2960. The current consolidation shows that there is the potential for a breakout above this level.
This would validate the bullish flag pattern with the GBPUSD likely to break past 1.30 threshold. To the downside, the lower support at 1.2582 will be key.
Gold Prices Recover After Losses
The precious metal was weaker on Tuesday, but the declines were smaller. This comes a day after gold prices fell sharply boosting risky assets.
The current consolidation is expected as investors wait for today’s Fed meeting. But the bias looks to be to the downside for the moment.
The precious metal has been quite erratic in the recent few sessions. This comes after price failed to break past the resistance area of 1511.50. The retest of this level promptly sent gold prices lower. The breakdown of the rising trend line now likely opens the way for declines to 1462.20.