US markets move higher as trade talks advance
Yesterday was a great day for Wall Street as investors cheered ongoing talks between the United States and China. Indicating the seriousness of the discussion, Xi Jinping’s senior economic official paid a visit to the negotiators. Liu He, who is the Vice Premier of the People’s Republic of China, was not scheduled to take part in the preliminary talks. Investors believe that there is a likelihood that the talks will yield results this time after failing to do so a year ago.
The price of crude oil edged higher as Saudi Arabia and other OPEC countries moved to slash production. Indeed, the price of oil has managed to move significantly higher this year. Investors believe that a deal between US and China will help increase the demand of oil. Increased demand and lower production are good catalysts to push the price higher.
The market will likely see low volatility today as no major economic releases are expected. Data from Switzerland will reveal the employment numbers. The country’s unemployment rate is expected to remain at 2.4%. In the European Union, surveys of business optimism will be released. The business and consumer survey for December is expected to be at 108.2, which will be lower than previous data. The consumer confidence is expected to remain at minus 6.2 while the industrial sentiment is expected to drop to 1.2.
The EUR/USD pair dropped sharply during the Asian session. The pair fell from a high of 1.1484 to a low of 1.1435. On the hourly chart, the pair’s price was below the 14-day Exponential Moving Average and along the three-week average. The RSI has moved from an overbought level of 70 to the current 43 while the Average True Range indicator has remained at a neutral level. More declines will likely see the pair test the important level of 1.1400.
The USD/CAD pair continued the deep descent started last week. The pair has moved to a low of 1.3285, which is the lowest level since early December. On the four-hour chart, the pair’s price is below the 14-day and 28-day EMA while the RSI has moved deep into the oversold level. Investors will now watch closely the BOC interest rates decision scheduled for tomorrow. More declines will likely see the pair move to a low of 1.3200.
The GBP/USD pair declined slightly during the Asian session to a low of 1.2752. On the hourly chart, the pair has been on an upward trend this year, rising from a low of 1.2423 to a high of 1.2790. The Average Directional Index has moved from a high of 47 to the current 33 while the Bollinger Bands have narrowed around the current price. The upward trend could continue as the current decline is in a low volume market.