The risk-off sentiment in the market was fueled by President Trump’s latest tweet. The US-China trade talks which seemed to have been progressing hit a roadblock.
Trump tweeted that if China fails to make a deal, he would raise tariffs even higher. The talks also hit a snag after the US Senate passed a bill in support of the Hong Kong protests which did not go over well with China.
Euro Trades Mixed as USD Attempts to Rebound
The euro was trading mixed on Wednesday. This comes as the greenback attempted to make a comeback.
Traders were mostly trading off the major global cues with the FOMC meeting and the China trade talks at the forefront. Economic data from both the eurozone and the United States was sparse.
Can EURUSD Consolidate Result in an Upside Breakout?
The EURUSD has been trading within the resistance area of 1.1075 – 1.1062. This has led to a possible bullish flag pattern. But, an upside breakout is required in order for prices to push higher.
The minimum upside target is seen at 1.1131. This also coincides with the upper resistance area at this price point.
Crude Oil Jumps Amid Inventory Build-Up
Crude oil prices rose over 3% on Wednesday. The gains came as the oil markets ignored the weekly EIA report. Data from the Energy Information Administration showed another week of build-up in crude oil inventories.
For the week ending November 15th, there was a build-up of 1.4 million barrels. This was higher than the forecasts of 1.06 million. The EIA said that the inventory levels were 3% above the seasonal level.
WTI on Track to Retest Resistance
Crude oil prices have shot up and if the current momentum persists, price could test the resistance level of $57.64 – $57.87. The gains will still keep oil prices trading sideways. The floor is at 54.71 – 54.42. Oil prices need to break out from either of these levels to continue the direction.
Gold Volatile Due to Trade Narrative
The precious metal was trading volatile on Wednesday. The trade talks, which seem to have stalled now, raise prospects that the Phase-One deal will not be made this year.
The earlier view was that both parties would strike a deal by November. The precious metal recovered from losses from over a week, but the gains were subdued.
XAUUSD Likely to Maintain the Upside
XAUUSD could see further upside if the current momentum continues. Prices are trading within the 1483 – 1462 corridor. A breakout from this range could set the near term direction. But, given that the trade narrative has become a major driver, price action could continue to remain choppy for a while.