A lack of any clear fundamentals over the day on Monday, saw investors staying cautious. The major narrative of trade wars and risk aversion kept equity markets in check. Some of the major US equity indices closed in the red, while safe-haven gold and yen continued to remain in favor. The US dollar index gapped lower on Monday’s open but closed directionless.
Euro Posts Modest Gains
The common currency was seen closing the day with some modest gains. This came despite the ongoing political turmoil in Italy. The euro was seen brushing aside concerns as the Italian government could be facing down a no-confidence vote sometime soon.
EURUSD Trades Flat at the Moment
The currency pair has been trading in a rather tight range over the past few days. A sideways range has been established within 1.1185 and 1.1250. This flat price action could potentially see a breakout in the near term. The bias is still to the upside. But a convincing break out is required for the euro to push higher. The next main target is seen at 1.1340.
Sterling Bounces Back after Friday’s Losses
The pound sterling was seen posting some modest gains on Monday. However, price action was confined to the range from Friday’s close. GBP fell after the UK’s economy was seen contracting during the second quarter. Economic data today will see the monthly jobs report, which could help to push the currency higher.
Can GBPUSD Recover Off the Lows?
A continuation to the upside will depend on how today’s jobs report will come out. GBPUSD managed to rebound off the lows near 1.2014. However, price is seen struggling near the minor resistance area of 1.2082. A firm breakout above this level will potentially see some upside building up. Alternately, we expect the currency pair to continue its descent lower.
Gold Holds Steady Above 1495
The precious metal was seen posting some modest gains on Monday. Price was clearly looking to the upside amid cautious trading. Economic data was sparse leading to investor concerns staying in the forefront. The US monthly inflation report is due today. This could potentially be a market-moving event.
Can XAUUSD Remain Above 1495?
Gold has clearly formed support at the 1495 handle. While the precious metal is testing the previous highs, failure to breakout higher could signal a correction. This will depend on whether the support will give way. A breakdown below 1495 could trigger a further correction in gold. Watch the lower support in the 1447–1448 region which could be the downside target in the near term.