Equities Mixed as Trump Cheers US economy
Equity markets were mixed as both the Dow Jones and the S&P500 were slightly weaker.
The exception was the Nasdaq index, which rose to fresh highs. At the Davos summit, President Trump gave a speech. He cheered on the US economy noting how his policies are helping to create an economic boom.
Eurozone Economic Sentiment Beats Expectations
The economic sentiment report, as measured by the ZEW institute, rose to 25.6 for January, beating estimates of an increase to 16.3.
In December, the index was at 11.2. The increase was largely due to the easing trade tensions between Washington and Beijing. Germany’s economic sentiment index was also higher at 26.7 for January.
EURUSD Trades Flat for a Second Day
The common currency gave up the intraday gains as it rose to highs near 1.1113. However, unable to hold on to the gains, the EURUSD is trading flat.
The consolidation is happening near the support area of 1.1100. This could indicate a possible move lower to the 1.1072 level, marking the lower end of the support area.
UK Unemployment Holds Steady as Earnings Improve
The monthly labor market data from the UK saw the nation’s unemployment rate holding steady at 3.8%. This was in line with the general estimates.
However, the average earnings for the three months ending December were at 3.2%. This was higher compared to the estimates of a 3.1% forecast. It is also the same level as in the previous period.
GBPUSD Breaks the Falling Trend Line
The currency pair broker past the falling trend line on Tuesday. The current retracement could see prices retesting the breakout level close to 1.3008. If support forms here, we expect the upside bias to continue.
The upside target is at 1.3100. Overall, GBPUSD is consolidating within the levels of 1.3100 and 1.2960.
Gold Holds Steady as BoJ Maintains Status Quo
The precious metal is trading steady, albeit with some downside bias. Economic data on the day saw the BoJ leaving interest rates and QE unchanged. This was widely expected, leaving gold prices to remain flat.
Focus will now turn to today’s BoC meeting. With the overall sentiment among central banks being one of holding rates steady, gold prices have lost the impetus to build upon the rally late last year.
XAUUSD Consolidating Near Minor Resistance
Gold prices briefly broke to the downside from the minor trend line. However, price action pared losses.
Consolidation is taking place near the minor support/resistance level of 1562.80. The Stochastics is also looking slightly bullish. But a breakout above 1562.80 is needed to confirm the upside in gold.