The US dollar continued to post declines on Monday. Economic data on the day was sparse with only the German Ifo data coming out. President Trump once again brought up the Fed, noting that the central bank should cut rates.
Meanwhile, investors look to this weekend’s G20 summit where Trump and his Chinese counterpart Xi are expected to meet. The markets maintain the hopes that the US and China could still be able to salvage the trade talks.
Euro Tests $1.1400 Handle
The German Ifo business climate report released on Monday saw the index slipping for the third consecutive month. Data showed that the index fell to 97.4 in June compared to 97.9 in May. The data comes on the back of the German Bundesbank signaling that growth could contract in the second quarter of the year. The euro, however, brushed aside the data as it rose to test the $1.1400 handle.
Can the EURUSD Post Further Gains?
The currency pair has been rather bullish over the past week. However, as it approaches the $1.1400 handle, we could expect to see some pullback in price. The near term support is at 1.1339 which could hold any short term declines. Price will need to convincingly close above the 1.1400 handle in order to confirm further upside. The next main target to the upside is at 1.1541.
Oil Holds Steady, Awaiting Further Cues
WTI crude oil prices were trading flat on Monday after last week’s gains. The US administration announced fresh sanctions on Iran, but the market reaction was muted. Meanwhile, the UAE, Saudi Arabia, the UK, and the US issued a warning expressing grave concerns for rising tensions in the Middle East and specifically Iran.
Will Oil Correct Lower?
The commodity closed with a doji pattern for the second consecutive day near the resistance area of 57.50. The breach of the minor trend line indicates a possible downside correction in price. The initial support is seen at the 54.50 handle. If the bearish momentum picks up, oil prices could fall to the 54.50 level. Alternately, a reversal near the current levels could see further upside, pushing WTI to 59.50.
Gold Keeps Bullish Momentum Going
The precious metal continued to push higher as it rallied to fresh six-year highs. Gold gained over 1.5% on Monday as it comfortably closed past the $1400 level an ounce. The gains in gold prices come with a mix of a weaker USD and a call from President Trump for the Fed to cut rates. The US-Iran tensions also contributed to the solid gains.
Will Gold Hit 1450 an Ounce?
The current bullish momentum in gold prices could see the precious metal rising to the 1450 handle which marks the next key level of interest. Price is now posting gains for the sixth consecutive week. The main resistance level is seen at 1470 handle. To the downside, the latest support is at 1404.50 which could stall any short term correction in prices.