The Reserve Bank of New Zealand held its monetary policy meeting earlier today. In a surprise move, the central bank lowered the official cash rate by 25 basis points.
This brought the RBNZ’s interest rates to 1.50% from 1.75%. In its statement, the central bank interest rate projections signaled that there could be another rate cut later during the year.
Euro Mixed Ahead of Germany’s Industrial Production
The euro was trading modestly lower on Tuesday, losing 0.06% on the day. The currency was subdued with a lack of economic data and the mixed sentiment in the USD. Germany will be releasing its industrial production figures later today followed by the ECB’s monetary policy meeting accounts.
EURUSD Trades Flat
The EURUSD is maintaining its sideways range within 1.1226 – 1.1140 levels. This sideways range could remain in place until there is a breakout from this level. The bias remains mixed at the moment. To the downside, a close below 1.1140 could potentially trigger further declines in the near term towards the 1.1100 region. To the upside, gains could stall near 1.1280 resistance.
Oil Prices Dented by Fears of a Slowdown
Crude oil was trading lower on Tuesday. Oil prices were trading subdued as escalating trade wars increase the prospects of a global slowdown. This comes despite the US lifting the waivers on Iran oil export sanctions. Oil could be trading lower as we expect many of the refineries that were offline to jump back into production.
Can Oil Rebound Higher?
WTI Crude oil reversed the recent declines posting three consecutive sessions of gains on the 4-hour chart. However, price action remains caught below the resistance area of 62.85. A close above this resistance is needed for oil prices to retest the previous highs. The resistance area of 64.55 remains a key level for oil prices to establish resistance more firmly.
Gold Supported by US-China Trade Uncertainty
Gold prices maintained the gains as the risk off sentiment saw investors rushing to safe haven assets. US officials are raising tariffs on $200 billion worth of existing goods imports from China this Friday. The increase will be from the current 10% to 25%. Meanwhile, China’s vice premier Liu He will be in Washington from Thursday to continue the trade talks.
XAUUSD Looks Bullish
Gold has managed to break past the 1285 handle on the 4-hour chart. The bullish close above Monday’s doji candlestick pattern potentially indicates further upside in price. A breakout above 1285 will push gold prices to test the 1290 handle in the near term. If the bullish momentum continues, we expect an eventual rise to the 1302 region.