The markets opened on Monday to the news over the weekend about the U.S. President Trump announcing fresh tariffs on China. The Trump administration imposed a 25% tariff on about $50 billion on goods imported from China in response to alleged theft on intellectual property rights.
China retaliated by announcing that it would respond with the same measure, scale and strength, worsening trade concerns.
On the economic front, data from Friday showed that the Eurozone’s final inflation was confirmed at 1.9% while core inflation increased 1.1%. The euro was seen attempting to make a recovery after Thursday’s sell off.
Looking ahead, the economic calendar for the day is light. However, a number of central bank speeches are scheduled. It includes speeches from the FOMC members Bostic and Williams and the ECB’s Mario Draghi.
EURUSD intra-day analysis
EURUSD (1.1590): The EURUSD currency pair was seen closing on Friday with some modest gains after price action fell to the lows near 1.1539. The recovery in the euro currency is still a bit premature as the currency pair is seen trading near the previous lows. Further gains are required in order for the currency pair to post a convincing bottom. In the event that the support at 1.1610 – 1.1577 fails to hold the recovery, we can anticipate fresh declines in the euro currency below 1.1500 level of support.
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USDJPY intra-day analysis
USDJPY (110.49): The USDJPY currency pair managed to close near the resistance level of 110.62 by Friday’s close. However, price action is likely to struggle near this level unless there is a strong close above the resistance price level. We expect to see some near term pull back in price action as USDJPY is most likely to maintain its range within 110.62 resistance level and 109.57 level of support. The fact that price action is consolidating into a rising wedge pattern suggests a potential downside break down.
XAUUSD intra-day analysis
XAUUSD (1280.8250): Gold prices posted a strong decline on Friday after price action briefly tested the resistance level of 1304 – 1301 level. The sharp declines pushed the price of the precious metal lower to test the support at 1282. The declines sent gold prices to test intraday lows at 1275.47 before pulling back. We expect to see gold prices turning sideways for a short term within the 1282 and 1274 levels of price. A breakout above 1282 is required however for price to push higher to regain the 1301 level of support.