Global markets mixed ahead of busy news week
Global markets were mixed today as investors looked ahead to a busy week for the markets. This week, they will focus on a number of important news. On trade, they will focus on the outcome of the meeting between China’s Liu He and United States’ Robert Lighthizer and Steve Mnuchin. On economic data, they will receive GDP numbers and employment numbers from the United States. On earnings, they will receive numbers from the biggest companies like Apple, Google, and Amazon. They will also receive the interest rates decision from the Federal Reserve and also receive additional information on Brexit.
The price of crude oil declined today as investors continued to focus on the progress in Venezuela. Last week, the country’s opposition leader declared himself the winner. He seems to be supported by the general population, who have seen the country’s economy deteriorate in the past few years. He is also supported by the United States, United Kingdom, Australia and a number of western countries. The embattled president, Nicolas Maduro has received support from Turkey, China and Russia. He also has support from the military and the judiciary. While Venezuela is a failed state, it matters to the financial market because of its vast crude oil resources.
On Friday, the price of gold rose sharply and reached the highest level since June last year. The price jumped as the wedding season in India neared, with local companies seeing more demand for their products. India, is one of the biggest markets for wedding products. Gold also rose as political uncertainty around the world rose with current issues happening in Europe, America and Latin America. It also rose ahead of the Fed interest rates decision.
The XAU/USD pair began an upward trend in August last year when the price traded at 1160.35. On Friday, the price reached a high of 1304. On the daily chart, the price is currently above the 21-day and 42-day exponential moving average while its Relative Strength Index (RSI) is slightly below the overbought level of 70. The Average Directional Index (ADX) has moved from a high of 56 to the current 30. This is an indication that the pair could experience some short-term weakness in the coming days.
The EUR/USD pair remained closer to Friday’s highs as traders waited for important data from the United States. The pair reached a high of 1.1420, which is higher than the short and medium-term EMAs. The price is also slightly below the 50% Fibonacci Retracement level. The parabolic SAR shows that the pair could continue the upward trend. If it does, it will likely reach the 1.1450 level, which is closer to the 61.8% Fibonacci Retracement level.
After days of moving higher, the GBP/USD pair eased today as traders waited to receive more information on Brexit. The pair declined to an intraday low of 1.3140. On the daily chart below, the price is below the 21-day and 42-day EMA. At the same time, the pair’s RSI is slightly below the RSI while the momentum indicator is easing. There is a possibility that the pair will continue moving lower to test the 1.3000 level.