The US dollar index was seen trading flat following two days of gains. Economic data was sparse on the day. The gains were also moderating after investors digested the progress of the US and China trade talks. Reports indicate that China is pressing Washington to roll back the tariffs imposed in September.
Eurozone Services PMI – Better Than Forecasts
The monthly services PMI data for September came out better than forecasts. Activity rose to 52.2 beating estimates of 51.8. The data was higher than the previous month’s reading of 51.8. Data from IMF showed that growth would slow for the Eurozone. The IMF said that the growth will be the slowest since 2013.
EURUSD Stalls at Support
The currency pair was seen stalling after support is being tested. The support area of 1.1075 – 1.1062 is holding the declines for the moment. This could offer some small respite as the currency pair could bounce to the upside. However, the gains might be limited in scope. Unless price rallies back to the upper resistance level of 1.1131, the currency pair will be range-bound.
Oil Prices Fall as Inventory Rises
Crude oil prices were down by over one percent on Wednesday. The declines came after the weekly crude oil inventory report saw an increase of 7.9 million barrels. This was more than the estimates of 1.5 million barrels for the week ending November 1st. The data corroborates the API’s report from earlier this week which also saw an increase in stockpiles.
WTI Crude Oil Retreats After Briefly Testing Resistance
Oil prices fell right after rising to test the resistance area of the 57.87 – 57.64 region. If the bearish momentum continues, then oil prices could slip further. However, there is a chance that support could form at the current levels of 56.40 – 56.50. If this support holds, then oil could potentially turn flat. To the downside, the lower support at 54.71 – 54.42 will be the level to watch.
Gold Snaps Back Recovering from Losses
The precious metal rebounded on Wednesday a day after price fell sharply. Gold prices are on track to recover close to 50% of the previous day’s losses. The rebound comes as the risk-on rally is starting to pause. However, gold will need to fully recover from Tuesday’s losses to maintain this short term uptrend.
Will XAUUSD form a Bearish Flag?
Price action on the 4-hour chart in gold indicates a potential for a bearish flag pattern. Currently, prices are testing the trend line. But a strong close above this trend line is needed to confirm the upside. Failure to post gains could see the bearish flag pattern coming into play. This puts the minimum downside target to 1440 support.