Risk-off sentiment once again made its way. This time, thanks to concerns of a possible impeachment of President Trump.
Equity markets whipsawed on Tuesday with the S&P 500 dropping the most since late August.
On the economic front, the Richmond Fed’s manufacturing activity also slowed in September. Firms also reported a decline in backlog of orders and weakening local business condition.
German Ifo Business Climate Increases Marginally
The German Ifo business climate data came in at 94.6 in September in line with estimates. This is a modest increase from 94.3 in August.
However, the Ifo downplayed the increase in activity. It noted that this was by no means a change in the trend. The Ifo data comes just a day after the Bundesbank noted that German economic slowdown could continue into the third quarter of the year.
EURUSD on Track to Test Resistance Level of 1.1030
The currency pair has managed to rebound following the recent declines. But the upside gains look limited for the moment. Price action will be potentially testing the resistance level of 1.1030. A reversal off this level will keep the currency pair to maintain the sideways range.
UK Supreme Court Rules Suspension of Parliament Unlawful
The UK Supreme Court ruled on Tuesday that the suspension of the UK parliament was unlawful. The ruling comes after the UK government appealed the Scottish court ruling a few weeks ago.
Following the Supreme Court’s verdict, some lawmakers called for Johnson to resign. However, the PM tweeted that he will get on and deliver Brexit on October 31.
GBPUSD Pares Losses. Near Term Upside Possible
The currency pair has reversed the recent declines. Price action is back to testing the resistance area of 1.2511. As long as price action remains below this level we expect the downside to prevail. GBP/USD is pending a retest of the lower support at 1.2370 in the short term.
Gold Gains as U.S. Consumer Confidence Ticks Lower
The Conference Board’s consumer confidence report ticked lower in September by nine points. The CB consumer confidence index fell to 125.1 in September, down from 134.2 in the month before.
The present situation index fell to 176.0 to 169.0 during the month. The risk-off sentiment also added to the gains late in the evening.
Will XAUUSD Rise Higher?
The precious metal continues to push higher amid lack of a test of the support level at 1508. If the current momentum persists, gold could test the near-term price point of 1545. Establishing resistance at this level will keep a lid on the gains in the near term. It would also confirm a lower high forming at this level. The price action will potentially confirm the overdue downside bias.