Article by ForexTime
Investors marched into Tuesday’s trading session adopting a “risk-on” attitude after US lawmakers reached a deal to end a government shutdown.
Asian stock markets ventured higher during early trading on Tuesday, following Wall Street’s record gains overnight. In Europe, shares climbed to fresh highs as optimism over sustained global growth continued to boost risk sentiment. With Wall Street powering to all-time highs on Monday as markets cheered the end of a three-day government shutdown, US stocks could remain buoyed by the positive sentiment this afternoon.
Dollar struggles to hold ground
It’s remarkable how the Dollar still remains mired near three-year lows despite President Trump signing a bill to end a US federal government shutdown. There is a suspicion that one of the culprits behind the Dollar’s weakness could be mounting concerns over the United States stance on global trade. With the Greenback still susceptible to further losses, as other major banks gradually tighten monetary policy, the Dollar Index remains heavily bearish. Taking a look at the technical picture, the Index is under pressure on the daily charts with technical lagging indicators such as the MACD and 50 Simple Moving Average going in line with the bearish bias. The 91.00 level is in the process of transforming into a new lower high. A breakdown below 90.30 could encourage a decline towards 90.00 and 89.60, respectively.
Currency spotlight – GBPUSD
A renewed sense of optimism over the Brexit negotiations pushed Sterling above 1.40 during Tuesday’s trading session.
While the lion’s share of Sterling’s gains this year can be attributed to ongoing Dollar weakness, the gains could partially be due to the renewed hopes of a “soft Brexit”. With the economic calendar fairly light today, price action is likely to dictate where the GBPUSD trades. From a technical standpoint, the currency pair is firmly bullish on the daily charts. The breakout above 1.3850 resulted in prices trading towards 1.3920 and 1.4000, respectively. A technical correction could be in the process with the next level of interest at 1.3900. Alternatively, a daily close above the 1.4000 could invite an incline towards 1.4070.
Commodity spotlight – Gold
Gold had a slight sparkle on Tuesday as the Dollar remained depressed around three-year lows.
The yellow metal remains bullish on the daily charts and has the potential to venture higher amid the weakening US Dollar. From a technical standpoint, the fact that there have been consistently higher highs and higher lows verifies the bullish bias on the daily charts. A technical breakout and solid weekly close above the $1340 level could encourage a further incline higher towards $1360. Bulls remain in firm control above the new $1324.15 higher low.
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Article by ForexTime
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