18.11.2019: EUR, GBP gain ground on weak US dollar (EUR/USD, GBP/USD, GOLD)


Optimism over the US-China trade talks has increased risk appetite but dragged down the US dollar. At the beginning of the trading week, the euro managed to remain bullish. The euro/dollar pair hit its new 2-week high near 1.1060. The European currency has been rising for the third consecutive week, gaining momentum from its last week’s low in the area of 1.0990. The pair is likely to reach 1.1093 and then 1.1110 due to the weak US dollar. The US currency was weighed down by the mixed economic statistics. Retail sales data from the US released on
Friday showed quite disappointing results, raising doubts about the US economic power. Now traders are focused on the Fed’s monetary policy decision. They believe that the regulator is likely to lower its interest rates again despite Jerome Powell’s hints about taking a break from interest rate cuts. However, if the economic performance continues to be weak, the Fed will be forced to ease its monetary policy again. The pound sterling managed to assert strength advancing to 1.2960 amid a weaker greenback and anticipation of the FOMC Meeting Minutes. Now analysts expect the price to continue its bullish run and consolidate near the level of 1.3017. The main driver for the pound’s movement is still the news on Brexit. Traders have taken into account the statement of Britain’s Prime Minister Boris Johnson that the Conservative Party candidates would support the deal on the country’s withdrawal from the EU in the early elections. This news boosted demand for the pound among bulls as expected. The gold price sunk amid risk aversion and a sudden increase in the US Treasury yields that undermined the demand for safe-haven assets. Now it remains at the level of its multi-day low in the area of $1,460 per troy ounce. Gold continued its pullback from the resistance area at $1,475 that started last week. However, the weak US dollar is likely to support gold and restrain its further decline. This week, the economic calendar is quite eventful. Later this week, Christine Lagarde, the new chief of the European Central Bank, is scheduled to give a speech. On Thursday, the European regulator is set to publish the minutes of its meeting. On Friday, the IHS Markit will release the Eurozone PMI data. We continue to keep close tabs on the market developments. Subscribe to our channel and stay tuned!

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