US President Donald Trump tweeted on Thursday that his Chinese counterpart and himself will soon be signing a trade pact.
The news comes after skepticism that a longer-term trade deal could be under threat. Equities pulled back despite the positive news and a beat on earnings. This led to some modest gains in safe-haven assets.
Euro Eases After Better Q3 GDP Report
The euro traded weaker despite a better than expected GDP report. Data from Eurostat showed the third quarter GDP rising by 0.2%.
This beat estimates of a 0.1% increase. The third-quarter gains were at the same pace as the previous quarter. Economists we expecting growth to slow on the back of weak figures from Germany.
EURUSD Retreats from Resistance
The euro pulled back after price fell short of testing the resistance level at 1.1177. However, the failure to test this resistance level firmly could mean that a rebound might occur.
A firm retest of the resistance level at 1.1177 will keep the currency pair range-bound. The lower support at 1.1075 will keep a lid on the declines for now.
UK Election Campaign Starts
With the announcement that the UK will hold its general elections on December 12th, election campaigns got underway.
Both the Conservative and the Labor party are vying for the spot at 10 Downing. The election comes as Boris Johnson seeks a majority in the UK parliament in order for the Brexit deal to pass.
GBPUSD Back at Resistance
The cable rallied back but is failing at the resistance area of 1.2960. The retest of this level comes as the Stochastics indicator shows overbought levels.
This could lead to a possible decline in the near term. There is a strong hidden bearish divergence on the daily chart. GBPUSD will need to breakout below 1.2865 in order to confirm a corrective move to 12582.
Gold Prices Advance Despite Fed’s Neutral Tone
The precious metal logged gains on Thursday, continuing from the momentum early in the previous sessions. The gains come despite the Fed signaling that it would not be cutting rates further.
However, a modest risk-off sentiment in the market due to larger themes led to gains in safe havens.
XAUUSD Could Breakout Higher
The precious metal is testing the familiar resistance area of 1511. A breakout above this level will trigger the bullish ascending triangle pattern. This will see further gains in store.
However, with prices pulling back from the resistance level there is scope for a possible correction lower as well. On the daily timeframe, Thursday’s rally sees price breaking out from the falling trend line. This could confirm the upside in the near term.