The International Monetary Fund (IMF), in its latest report, trimmed global growth forecasts. For the year 2020, the IMF expects growth to rise by 3.3%. This is slightly higher in comparison to the 2.9% forecasts which grew in 2019.
However, despite the increase, the pace of growth is seen to be one of the slowest. By 2021, growth is forecast to rise slightly to 3.4%.
German Producer Prices Rise 0.1% in December
German producer prices were seen rising 0.1% on the month in December. The data was slightly above estimates as economists forecast a flat reading. The increase in producer prices was also higher compared to the flat reading in November. The euro was, however, unmoved as the declines continue.
EURUSD Continues to Drift Lower
The common currency continues its declines as it dipped to a one month low. Price action remains weak but it currently trades within the support area of 1.1100 and 1.10725. The Stochastics oscillator remains in the oversold level, however, and could indicate further declines in the near term. A breakout above 1.1100 will confirm the upside.
Sterling Stays Subdued Ahead of Payrolls Report
The pound sterling remains subdued amid a lack of any clear fundamentals. Economic data was sparse on Monday. However, the payrolls report is due later today. Investors forecast that the unemployment rate will drop to 3.1%, while wage growth is forecast to remain steady at 3.8%.
GBPUSD is Consolidating Near the Bottom
GBPUSD is trading rather flat on the day. Price action remains close to the support level of 1.2960. But we expect to see a firm retest of this support. The bias to the upside is building up if the downside doesn’t break. A breakout to the upside will signal a move back towards the 1.3100 level of resistance.
Gold Prices Remain Trading Flat
The precious metal continues to drift slightly flat albeit with an upside bias. The flat price action remains in play as investors await some big-ticket items later this week. A number of central banks are meeting over the week including the BoJ and the ECB. However, no changes are expected from either of the central banks.
XAUUSD Approaching Resistance
XAUUSD is approaching the resistance level of 1562. A breakout above this level will confirm the upside and could push gold prices back to previous highs. However, if the resistance level fails, we could expect to see a downside breakout. This keeps the bias in XAUUSD equally balanced. The lower support is seen at 1534.00.