The markets were trading relatively flat on Monday ahead of key events coming up.
Britain is set to go to the polls this week, with odds currently in favor of the Conservative party gaining a majority.
Elsewhere, the US-China trade talks continue as the deadline for December 15th edges closer. The US is set to levy fresh tariffs on Chinese goods if there is no deal reached by then.
The Fed and the ECB are also due to convene over the week.
Eurozone Sentix Investor Confidence Improves
The Sentix investor confidence for the eurozone turned positive for the first time in six months. The index rose to 0.7 from -4.5 previously. The data was also better than the estimates which forecast a decline to -5.4. This was also the highest level since March 2018.
EURUSD Fails at Minor Resistance
The euro was reversing the intraday gains after a brief rally. Price action turned weaker after the euro hit 1.1072. A retest of this level to establish resistance was expected.
Price action will now have to slip below the recent pivot lows of 1.1055 to confirm further downside. The next main support that could be tested is at 1.1000.
Sterling Propped Up as UK Election Looms
The pound sterling was perched at a six-month high ahead of the parliamentary elections this week. Polling is set to start on 12th December and is expected to continue throughout the day.
The Conservative party remains the firm favorites at the moment. However, the Labor party is catching up. PM Johnson hopes for a majority win in order to proceed with the Brexit plans.
GBPUSD Rally is Likely Overdone
The cable was seen trading flat as it attempted once again to break past the previous highs at 1.3160. Prices have been rejected at this level. If this continues, we expect the GBPUSD to likely stall at this level. The short term support is at 1.3100. If price breaks below this level, we expect GBPUSD to correct to 12960.
Gold Prices Trading Flat as Investors Seek Direction
The precious metal was largely muted on Monday. This follows last Friday’s declines after the release of the payrolls report. Amid a number of factors impacting the flows, gold has consolidated into a small range. With key events such as the Fed & ECB meeting, UK elections and trade, volatility in gold could pick up over the week.
XAUUSD Downside Bias Prevails, For Now
The precious metal made attempts to post a recovery. However, the gains were capped near the resistance level of 1462.00. We anticipate that price will consolidate around this level in the short term. A breakdown is however needed to confirm the downside. The lower support is seen at 1445.00