Equity markets resumed the rally following Iran’s response to the US attacks.
Investors remain hopeful that the tensions will not escalate too far.
This has resulted in the precious metal retreating amid a surge in risk appetite. Investors are also looking forward to this week’s payroll report.
Germany Factory Orders Slip in November
The latest factory orders in Germany saw a decline. Industrial orders fell 1.3% on the month beating forecasts of a 0.2% increase and a decline from 0.2% previously.
Trade balance figures from France were also weaker.
EURUSD Testing the Rising Trend Line
The common currency is currently testing the rising trend line. After the break down below the support level of 1.1131, this will be the next dynamic support. In the event of a break down below this trend line, the lower support at 1.1100 will be open for a retest. This potentially confirms the downside below 1.1131.
Sterling Under Pressure on Rising Dollar Strength
The pound is trading weaker amid a broader strength in the US dollar. The USD is rising for the second consecutive day. Economic data from the UK remains sparse in the meantime. Still, Brexit continues to remain the biggest risk for investors.
GBPUSD Forming into a Descending Triangle
The GBPUSD currency pair is currently threatening the 1.3100 level of support. If support breaks, we expect accelerated declines further. The minimum downside is at 1.2960. Alternately, to the upside, price action will need to break the minor falling trend line for any hopes of an upside bounce.
Gold Prices Fall as Risk Appetite Improves
The precious metal is retreating after a strong rally in the commodity. Falling tensions have made the safe haven less appealing. This would potentially mark a decline in gold prices. However, given the fact that there is potential for the middle east tensions to rise, it is possible that gold prices could snap back.
XAUUSD Could Post Declines in the Near Term
XAUUSD is posting declines and this is likely to see a retest of the previous lows near 1557.76. If this support breaks then prices could slip further. The next main support is at 1534.10. The upside bias remains as long as prices are supported above this level.