Trump Says Trade Deal after Elections
Investor sentiment fell across the board following President Trump’s comments on the China trade deal. Trump said that it would be better to wait until the 2020 elections for a trade deal with China. The comments come in contrast to the earlier position where hopes of a trade deal with China rose on positive tweets. Meanwhile, issues relating to the US stance on the Hong Kong protests weighs heavily. The US is scheduled to raise tariffs on China if no deal is made by December 15th.
Eurozone Producer Prices Rises in October
Producer prices data for the Eurozone saw a modest increase for October. Inflation at the factory gate rose 0.1% on the month. On a yearly basis, Eurozone PPI is down 1.9%. The gains were driven in part by the energy sector which rose 0.7%.
EURUSD Attempts to Post Further Gains
The currency pair, after a brief consolidation near the resistance area, is looking to breakout higher. Although price action needs to be more convincing at this point, the bias is shifting to the upside. If the resistance level of 1.1075–1.1062 is tested for support, then the common currency will be aiming for 1.1131.
UK’s Construction Sector Remains in Contraction
The construction PMI data released by Markit on Tuesday showed a contraction. But the pace of contraction was relatively slower. The construction PMI rose to 45.3 in November from 44.2 in October. This was the slowest decline since July this year. The construction PMI data comes on the heels of weak reading from the manufacturing sector.
GBPUSD Settles Above Resistance
The cable has managed to break past the upper resistance level of 1.2960. But the current gains do not look strong enough. This gives a risk of a possible downside move. However, if support is formed at 1.2960, then GBPUSD could be looking towards the 1.3000 psychological level as the next target.
Gold Prices Rise on Trade Worries
With equities falling, investors were seen slowly piling into safe-haven assets. Gold prices rose modestly on the day on Tuesday as doubts emerge on whether the US will be able to reach a deal with China. However, in the short term, the current gains could be limited in the backdrop of key economic data from the US over the remainder of the week.
XAUUSD on Track to Test Resistance
The rebound in XAUUSD will see price gradually drifting to the next main resistance level of the 1483 region. Further gains can be expected if the precious metal breaks out above this level. In the short term, momentum is currently overbought which could indicate a short term consolidation or a pullback to the current short term rally.