China Cuts Tariffs in Anticipation of a Trade Deal
China is all set to lower tariffs on imports of certain goods starting from January 1st, 2020. The move comes ahead of a much-anticipated trade deal with the United States. The decision will lower the tariffs on over 850 goods. So far, there hasn’t been any official confirmation of when the trade deal will be signed. Equity markets were trading weaker despite the news that seems to be positive towards the trade deal.
Germany Import Prices Up 0.5%
Import prices in Germany grew 0.5% on a month over month basis in November. On an annualized basis, import prices were up 2.1%, excluding oil and minerals. The data was better than the estimates of a 0.1% increase. It also reversed the 0.1% decline from October.
EURUSD Bounces Off Support
Eurodollar fell to the support area of 1.1072 before posting a modest rebound. The currency pair could consolidate within the range of 1.1100 and 1.1072. If the consolidation continues, then there is scope for a bearish flag pattern formation. This will indicate a possible dip to the downside. The minimum target is to the downside, around the 1.10 round level.
Sterling Weakens as Brexit Concerns Linger
The pound sterling continued its descent as traders wrapped up for the holiday week ahead. There was no market-movings news on Brexit. Last we heard, EU officials are said to remain committed to having a deal in place. Meanwhile, PM Johnson has maintained his stance about leaving the EU by the end of 2020, regardless of a deal being in place.
GBPUSD Declines More Than 0.5%
Cable fell sharply on Monday as it broke past the support level of 1.2960. However, there is a likelihood of the currency pair turning flat in the short term. Given the Stochastics oscillator trading in the oversold level, we could anticipate a rebound with gains likely capped at 1.3100 round level.
Gold prices post modest gains
The precious metal was seen making some modest progress on Monday. Economic data from the United States saw the durable goods orders coming in flat for the month. This was well below the estimates. The positive news from China also failed to push the safe haven lower.
XAUUSD struggles at resistance
The precious metal is seen retesting the resistance level of the 1480 region. This marks the third attempt since early December. Failure to break past the resistance level will keep prices subdued. The sideways range within 1480 and 1460 will remain in play. To the upside, a breakout will trigger gains to the 1500 level.