EUR/USD registers modest gains on Tuesday, yet it remains trading within familiar levels amid the lack of catalysts as the US government remains shut. However, upbeat news regarding the US-China trade war, weakened the Dollar and boosted the Euro. The pair trades at 1.1654, up 0.09%.
Gold price drops 0.63% on Tuesday during the North American session with the yellow metal suffering from its safe-haven appeal as hopes of a de-escalation of the US-China trade war keep ebbs and flows going toward riskier assets like US equities.
The AUDUSD buyers came in against the 38.2% retracement at session lows today, and that started a run to the upside. The 50% retracement is now been broken.
The first look at the low from October 14 at 1.32476 finds willing buyers. Getting below that level and the 200 day moving average at 1.32346 is the key target for sellers.
Pound Sterling (GBP) is a moderate underperformer on the session so far, falling 0.1% against the US Dollar (USD) at writing after giving up early gains through the upper 1.33s in Asian trade.
The Euro (EUR) is grinding slowly but surely higher, with the support of short-term spreads which are maintaining the recent compression in EZ/US short-term yields, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
Gold (XAU/USD) stabilizes on Tuesday after coming under heavy selling pressure earlier in the day, as investors continue to rotate out of safe-haven assets amid renewed risk-on sentiment.
Gold trades lower for the third consecutive day on Tuesday, depreciating beyond 4% so far this week, as new trade agreements between the US and Asian countries underpin investors' appetite for risk, weighing safe-havens like Gold.
Risk for US Dollar (USD) remains on the downside, but it is unclear now if there is sufficient momentum for a break of the y-t-d low of 7.0860, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Upward momentum is starting to build, but for a continued advance, US Dollar (USD) must first close above 153.00, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Australian Dollar (AUD) is expected to edge higher to 0.6575; the next resistance at 0.6595 is not expected to come under threat. In the longer run, AUD could edge higher to 0.6575, with lesser odds of reaching 0.6595, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Pound Sterling (GBP) could trade in a range of 1.3320/1.3370. In the longer run, downward momentum is starting to slow, and the likelihood of a continued decline below 1.3295 is diminishing, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Risk assets start the week in a positive mood. Weekend reports suggest the US and China have found common ground on topics like the sale of TikTok, soybean purchases and tariffs.
Euro (EUR) could rise gradually, but it is unlikely to break above the major resistance at 1.1680. In the longer run, for the time being, EUR is likely to trade between 1.1585 and 1.1680, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Since the middle of the year, EUR/USD has essentially been trading within a range of roughly 1.15-1.18, and the US currency has reacted little to the recent tariff news in particular, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.
One might have thought EUR/USD would be performing a little better given the global risk environment. A US-China trade truce would be welcome news for global trade, allowing for some nascent optimism in business sentiment to extend, ING's FX analyst Chris Turner notes.
EUR/JPY halts its five-day winning streak, trading around 177.20 during the European hours on Tuesday. The technical analysis of the daily chart indicates the prevailing bullish bias as the currency cross moves within the ascending channel pattern.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is extending its losses for the second consecutive day and trading around 98.60 during the Asian hours on Tuesday.
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