On Wednesday, the US House voted to begin impeachment hearings against President Donald Trump.
However, the markets were unmoved by the developments. The focus now shifts to the Senate which is controlled by the Republicans.
There is a strong chance that the President will not be convicted.
Euro Trades Modest on Weak US Data
The euro was seen posting some modest gains on Thursday. The gains came largely on data from the US amid a lack of any fundamentals from the eurozone.
The Philly Fed manufacturing index fell to 0.3. This was well below the estimates of a decline to 8.1. The weekly unemployment claims also rose more than expected.
EURUSD Testing the Trend Line
The currency pair is consolidating below the support level of 1.1131. Price action was briefly retesting the minor trend line as well as the confluence of the horizontal price level. As long as this price level holds, we do not expect to see prices rising further.
Bank of England Holds Rates Steady
The Bank of England held its monetary policy meeting on Thursday. As widely expected, the central bank left interest rates unchanged at 0.75%. The bank did, however, cut its growth forecasts for the United Kingdom.
Besides the BoE meeting, Scotland’s DUP also formally requested for a Scottish independence referendum, which if approved could lead to a possible exit of Scotland from the United Kingdom.
GBPUSD Extends Below Support
The currency pair continues to extend its declines further. The cable fell below the support area of 1.3100. This now opens the way for further declines to 1.2960 where support is likely to be established. We expect the currency pair to maintain the sideways range within the levels of 1.3100 and 1.2960.
Gold Trades Flat Amid Lack of Fundamentals
Gold prices continue to trade mixed amid a sparse economic calendar. On Thursday, the BoE and the Norges bank kept rates steady. The Swedish Riksbank, hiked rates from -0.25% to zero percent.
But the decisions did not impact the safe haven asset. There was also no flight to safety despite the impeachment process in the US House.
XAUUSD Stays Flat
The precious metal continues to remain range bound with no direction in sight. XAUUSD remains range bound within the 1483 resistance and 1462 support. As long as this range is not breached, we expect the precious metal to remain range bound.
The longer term ascending triangle pattern remains in play for the moment. But a breakout above 1483 is needed to confirm this upside bias.