Trade deal optimism keeps market bulls underpinned amid holiday thin trade. Wall Street set to open and trade positive on cues from international market while market closes early on Christmas eve.
Summary: Global Equities display a clear tone of bullish price action in global market today. The positive tone is inspired by optimism surrounding trade deal which is viewed as sign for good global growth in 2020 causing lingering traders to place bullish bets amid holiday thin market. The positive cues from Asian markets carried forward into European markets causing major indices and equities to open positive and scale record levels despite weak trading volumes. Early close on European markets also played a major role in positive price action. In Forex market, most major global currencies are finally trading positive as risk appetite seems relatively high in global market finally giving market bulls the strength required to overcome pressure from firm USD resulting in flat price action.
Precious Metals: Rare metal continue to trade positive as investors increased fund flow to safe haven assets amid holiday thin trading volumes. Gold saw price reach six week high in Asia with price of gold futures seeing nearly 15% increase since the end of last year making it biggest annual gain since 2010.
Crude Oil: Crude oil price saw sharp upsurge in price action ahead of Chirstmas eve as optimism surrounding trade deal and resultant global growth outlook favors increased demand for crude oil consumption in year ahead. This along with supply cut agreement from OPEC given crude oil bulls a solid boost while reducing odds of possible glut in 2020 Q1 keeping demand to supply ratio in bulls favor.
AUD/USD: The pair is trading positive in the global market today but the price action displayed a clear tone of consolidation near 1-week highs as fresh optimism surrounding China-U.S. trade deal and resulting risk on investor sentiment kept AUD bulls supported. However, firm USD continued to offset bull’s pressure preventing a change in directional strength for price movement.
On The Lookout: There isn’t much to look forward to during today’s trading session. Geo-political events don’t seem likely to see any major change ahead of Christmas either. While focus may remain on headlines related to events, given early market close and holiday thin trading volumes, there isn’t much chance for sharp change in directional bias today. Speculative bets to drive trading today with Wall Street all set to close early at 13:00 HRS. Economic calendar schedule is also silent suggesting range bound activity for rest of the day’s trading session.
Trading Perspective: While speculative bets may continue to drive activity in forex and equity markets, major bets are unlikely to be seen in either market. However, both markets will see traders prepare some of their investment and poise their trades to take advantage of volatility expected from post Christmas market opening over local headlines which suggests the possibility of spike in pending order volume towards end of the day.
EUR/USD: The pair is mostly trading flat in today’s session. Having failed to hold fort above 1.11 handle ahead of yearend holiday season trade, it is unlikely for price to scale the barrier ahead of new year. The pair now remains steady above mid-1.10 handle while firm USD continues to pressure EURO for possible break below support level of 1.105 around which price is expected to move in circles for rest fo the day.
GBP/USD: The pair is trading positive as broader positive outlook surrounding Brexit proceedings underpinned GBP bulls offsetting pressure from firm USD. This helps pair remain steady above 1.2950 handle for now but hard Brexit worries from UK continues to weigh down pair preventing it from scaling 1.30 handle. Amid lack of fresh Brexit update, GBP will trade zig-zag around 1.2950 handle.
USD/CAD: The pair is trading flat as there isn’t much change on scenario surrounding the pair so far. Positive crude oil price and trade deal progress related optimism underpins CAD while USD supported by bond yields and strength from trade deal optimism keeps USD bulls supported. As either side lacks strength to offset pressure from other currency the pair traders in circles around 1.3130/40 handle which change for price scaling above mid-1.31 handle ahead of Christmas eve.
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