Markets Open On A Soft Note

Lack of economic data and fresh trade rhetoric saw the markets trading rather subdued on Monday. The US dollar index was trading flat although price remains steady near the recent highs.

Wednesday’s FOMC meeting minutes could be the main catalyst in the near term. On the economic front, the existing home sales report is due later today. Fed members, Evans and Rosengren are also due to speak later in the day.

Tariff Hikes Remain a Concern for the Eurozone

Although the US administration put off the potential hike in tariffs on European automobile imports, concerns still remain. Compared to the 22% duty on US car imports to the eurozone, the US currently has a 2.5% duty on automobile imports. Concerns about a hike in tariffs saw the European equity markets closing in the red on Monday.

EUR/USD Stays Subdued

Price action in the EUR/USD currency pair was subdued on Monday. The euro managed to close with some modest gains forming a possible spinning bottom pattern. A bullish follow-through is required in order to confirm a short term correction to the upside. Price is, however, likely to extend lower to test the 1.1140 support.

eurusd chart

 

GBP Awaits Further Clues

The British pound continued its descent, but price seems to have steadied for the moment. Economic data remains sparse with only the inflation report hearing due later in the day. This comes ahead of the inflation due later in the week. Headline inflation is forecast to rise 2.2% on a year over year basis in April. Stalemate on Brexit talks continues with no agreement in sight within the UK’s parliament.

Can GBP/USD Hold Steady Near Current Lows?

The GBP/USD has been consolidating near the support level of 1.12716. While the Stochastics oscillator remains very oversold, there is scope for an upside bounce. A close above 1.2755 could potentially confirm a corrective move. The initial target is seen at 1.2897 followed by 1.2975.

gbpusd chart

 

Gold Eases as Geopolitical Tensions Soften

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