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Besides the ongoing trade tensions, gold prices also managed to rise on the back of muted economic data from the US. The inflation report for April saw headline consumer prices rising 0.3% on the month. Annually, headline inflation rose 2.0% while core CPI eased to 2.1% from the month before. Most of the gains in inflation were due to higher energy prices which rose 2.9% in April.

Gold Prices Settle Back into the Range

Friday’s gains in gold prices did little to keep the price supported. After briefly rising above 1285 handle, gold prices slipped back below this level in early trading today. A continued bearish momentum could push gold prices back to trading within 1285 resistance and 1270 support. Unless we see a daily close above 1285.87, the bias remains flat for the moment.

According Bank of France business survey results, the economy could be expanding by 0.3% in Q2.

The survey noted that:

• In the manufacturing industry, the business sentiment indicator stood at 99 in April, after 100 in March. Industrial production slowed down in April but business leaders expect it to pick up in May.
• In services, the business sentiment indicator stood at 100 in April, after 101 in March. Service sector improved moderately and growth is expected to continue in May.
• In construction, the business sentiment indicator stood at 105 in April, after 106 in March. Construction activity decelerated but improvement is expected.

Full release here.

Oil prices remained muted despite the mounting geopolitical tensions between the United States and Iran. Oil prices closed with small gains of 0.12% on the day on Friday. Investors wait for further geo-political clues including the ground developments in Venezuela and the attempted coup to overthrow the current regime.

Oil is Likely to Maintain the Sideways Range

Crude prices have been trading within the 62.85 and 60.33 levels of resistance and support respectively. This sideways range is expected to continue unless we see a breakout from this level. The bias is to the upside as we expect to see oil prices potentially retesting the 64.55 handle to establish resistance more firmly.

The single currency managed to post modest gains against the USD. By Friday’s close, the euro was up 0.20%. The gains came as regional economic data saw Germany’s trade balance coming out better than expected. The single currency brushed aside somewhat weaker industrial production figures from Italy and France.

Can the EURUSD Hold on the Gains?

The currency pair closed above the resistance level of 1.1226. At the time of writing, the currency pair is testing this level. If support is established at 1.1226, then the EURUSD could potentially aim to bounce higher. The next main resistance level is seen at 1.1280.

Pivot (invalidation): 61.80

Our preference Short positions below 61.80 with targets at 61.20 & 60.90 in extension.

Alternative scenario Above 61.80 look for further upside with 62.25 & 62.50 as targets.

Comment As Long as 61.80 is resistance, look for choppy price action with a bearish bias. Crude Oil is capped by a declining trend line drawn from May 10.

Pivot (invalidation): 14.7800

Our preference Short positions below 14.7800 with targets at 14.6200 & 14.5500 in extension.

Alternative scenario Above 14.7800 look for further upside with 14.8600 & 14.9500 as targets.

Comment The RSI advocates for further decline.

Pivot (invalidation): 1288.50

Our preference Short positions below 1288.50 with targets at 1279.00 & 1276.50 in extension.

Alternative scenario Above 1288.50 look for further upside with 1291.50 & 1295.00 as targets.

Comment The RSI is bearish and calls for further downside.

Japan leading index dropped to 96.3 in March, down from 97.1. Coincidence indicator dropped to 101.9, down from 102.8. The Cabinet Office described the assessment of coincidence index as "worsening". That's a clear follow up to February's assessment of  "a turning point towards a downgrade".

The deterioration in economic situation raised the chance that Japan is already heading to a recession. US-China trade conflict has been a clear drag to the export-led economy. With current escalation in tensions, Japan could start to feel heavier impact ahead.

Full release here.

Pivot (invalidation): 2860.00

Our preference Long positions above 2860.00 with targets at 2896.00 & 2913.00 in extension.

Alternative scenario Below 2860.00 look for further downside with 2838.00 & 2626.00 as targets.

Comment The RSI is mixed to bullish.

Pivot (invalidation): 12030.00

Our preference Long positions above 12030.00 with targets at 12178.00 & 12230.00 in extension.

Alternative scenario Below 12030.00 look for further downside with 11955.00 & 11880.00 as targets.

Comment A support base at 12030.00 has formed and has allowed for a temporary stabilisation.