The US dollar continued to maintain steady gains, rising for the third consecutive day. President Trump and China’s Xi are expected to meet during the G20 meeting in Osaka, Japan over the weekend.
US Treasury Secretary, Steve Mnuchin said that both countries were 90% on the way to complete the trade talks. Gold prices retreated as equity futures attempt a rebound.
German Gfk Consumer Confidence Dips in June
The German Gfk consumer confidence survey report released yesterday saw the consumer confidence falling to 9.8 against expectations of 10.0. This was down from 10.1 in May. Gfk consumer confidence is in a steady decline since the past few months. The euro was trading flat on the day, logging gains of 0.02%.
EUR/USD to Remain Flat in the Short Term
The declines in the common currency come after the previous rally sent price higher to test the 1.1400 handle. Since then, the currency pair has been drifting sideways briefly testing the support near 1.1339. We expect this sideways range to be maintained in the near term. A breakout from this level could signal a possible move in the next leg of the direction.
WTI Gains on EIA Report
Crude oil prices posted modest gains on Wednesday. Price gained 0.62% on the day after the Energy Information Administration’s weekly crude oil inventory report. The report showed that US stockpiles posted a drawdown of 12.79 million barrels for the week ending June 21. This followed the earlier report from API which showed a decline in the inventory as well.
Will Crude Oil Prices Continue Higher?
The current gains in WTI crude oil have pushed the commodity higher. Oil prices broke past the initial resistance level of 57.50. This came after prices remained flat for nearly two days. Following the breakout above this resistance, oil prices are likely to test the 61.00 handle in the near term. This marks a retest of the price level that previously served as support. If resistance is formed here, we expect oil prices to post modest declines back to 57.50.
Gold Rally Fizzles as Market Sentiment Picks Up
Gold posted declines on Wednesday as the precious metal fell by over 1% on the day. This came right after prices tested a new six-year high. The declines came despite the economic data from the US showing a weak durable goods orders report. Headline durable goods orders fell 1.3% on the month in May while core durable goods orders managed to rise 0.3%.
Will XAU/USD Correct Lower?
The precious metal is testing the initial support at 1404.30. With the Stochastics oscillator in the oversold levels, there is scope for price to rebound to the upside. However, failure to post higher highs could signal short term weakness in price. This will eventually see gold prices easing back to the 1404.30 level. A break down below this support will push gold prices lower to the 1350 handle.