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The gold price appreciated 0.26% since Friday's trading session. The XAU/USD passed the monthly PP at the 1,1956 mark on Tuesday.

In regards to the near future, the yellow metal will surge upwards to the bottom boundary of the ascending medium channel, but might be stopped due to the strong resistance of the 200-hour simple moving average and the previously broken medium channel line.

On the other hand, the rate might use support of the monthly PP at the 1.195.60 mark, which may push the yellow metal upwards to pass the medium channel line and the simple moving averages.

WTI oil ticked higher on Tuesday, but remains within two-day range, as the price is congested after strong rejections on both sides.

Looming US sanctions on Iran which keep tensions in the markets on tightening supply, keep the price afloat, however, bearish techs on daily chart warn that bear-leg from $71.38 (04 Sep spike high) may extend lower.

Daily MA’s are in bearish configuration and converged 20/30SMA’s cap upside attempts for now, while 14-d momentum is breaking into negative territory, with little impact from oversold slow stochastic so far.

Immediate downside risk is expected to continue while the price remains capped by 20/30SMA’s, with break below cracked pivot at $67.08 (Fibo 61.8% of $64.43/$71.38 upleg) needed to confirm bearish continuation.

Break above 20/30SMA’s would ease bearish pressure, but lift and close above converged 10/100SMA’s ($68.86) is needed to neutralize and shift bias higher.

Today’s release of US API crude stocks data and tomorrow’s EIA weekly crude inventories report are eyed for fresh direction signals.

Res: 67.87, 68.86, 69.00, 69.24
Sup: 67.50, 67.08, 66.85, 66.07

• GBP plunges after initial post-data gains;
• EUR edges lower despite better sentiment surveys;
• Brexit, US/China tariffs and US/EU negotiations remain in focus.

The start of the European session has been dominated by data releases from the UK and euro area, with investors also keeping a close eye on trade developments involving the US, not to mention Brexit.

It's been another volatile day for the British pound, which rose in the immediate aftermath of a decent jobs report for the UK before plunging despite there not being a clear trigger to warrant such a move. The jobs report itself paints a much better picture of the UK economy than many people generally have, with unemployment standing at 4% - the lowest since March 1975 – and wage growth nearing its highest levels since the financial crisis.

While these levels are still well below what we were seeing prior to a decade ago, they're certainly supportive of the Bank of England's policy of gradually raising interest rates when taken in isolation and the jump in earnings further aids this which is why we saw a bump in sterling. The flip side of this is the one-off factors that are likely contributing to the gains, rather than them being entirely organic and a result of a tight and competitive labour market, not the mention the uncertainty and risk with regards to the outlook.

The plunge in the pound shortly after has got people more interested though as there doesn't appear to have been much of a trigger, despite the currency slipping from close to 1.31 against the dollar to briefly below 1.30. It has since stabilised somewhere in the middle which suggests there may be something to the move even if the initial drop may have been overdone. If no news surfaces, it will be interesting to see whether the pound regains the lost ground over the course of the rest of the session.

The euro has also been in gradual decline over the course of the morning in Europe. An improved and better than expected ZEW economic sentiment survey for the eurozone and Germany appears to have done little to halt the decline, which is potentially due to the fact that it continues to languish around multi-year lows despite this minor reprieve. The US engaging in a trade spat with the region and using its auto industry as the pressure point is not doing much to help confidence at a time when it already appears to be experiencing a slight slowdown.

Trade continues to be at the forefront of people's minds at the minute, be that the risk of a trade war between the world's two largest economies, potential deals between the US and EU as negotiations get underway or the future relationship of two allies after Brexit. The EU has stolen much of the focus this week, with Michel Barnier yesterday talking up the prospect of a deal on the UK's exit from the EU in the next six to eight weeks which would avoid a damaging no deal Brexit scenario.

Swiss franc eases in risk-off

After falling to a 13-month last Friday, EUR/CHF rose 1% yesterday and continued to grind higher this morning amid improving risk sentiment. Indeed, risk aversion has decreased substantially lately amid positive development in the UK. Brexit concerns eased after Michel Barnier, the European Union’s chief Brexit negotiator, said it is realistic to expect a Brexit deal within the next six or eight weeks. Consequently, the pound surged 1.30 against the greenback, while GBP/CHF added 1.80% to 1.2740.

Nevertheless, the ongoing trade war between the US and China will keep investors on their toes as Donald Trump warned he was ready to roll out tariffs on $267 billion worth of Chinese exports to the US. For now, it seems that market participants are too not worried as risky assets recovered in the European morning. EM currencies were better bid, the Japanese yen, the Swiss franc and the US dollar slid, while the euro and high quality commodity currencies extended gains.

Given the high uncertainty surrounding the outcome of the US-China trade war, caution is still warranted. Chances are good this risk rally will be short-lived.

Pound up on Brexit optimism

Brexit continues to grab attention: still unsolved are the customs union and the Irish border. A pound rally remains driven by talk, thus driving currency volatility higher. For now the trend is positive, with the pound bouncing back from its August low as the EU signalled an imminent deal, a change from prior discussions in July. Although the interpretation is that the EU is becoming more conciliatory, we see no real revelation. Indeed, the timetable for a deal is still 18 October 2018, period during which the EU will have to ratify the deal before official Brexit day on 29 March 2019.

We remain sceptical that current GBP relief will be sustainable, as both sides are likely to stick on important details. We also expect the Bank of England’s meeting this Thursday to be a non-event. The central bank already increased its bank rate 0.75% six weeks ago. Little has changed since then. GBP/USD currently trades at 1.3065, bouncing from its mid-August low, heading along 1.31 in the short-term.

The EUR/USD moved exactly as planned and as previously predicted. The price is bouncing in regards to the Weekly supports, and the trend line has been compromised. If the price closes above the trend line at 1.1645, we could see 1.1685 and potentially 1.1730. That would qualify for a full bullish ascending scallop pattern. Only a close below 1.1520 will negate a bullish scenario.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Monthly Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Monthly Camarilla Pivot (Daily Support)

D L4 – Monthly H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect the price to react - aka the entry zone)

The Australian dollar bounced on Tuesday after posting new, marginally lower multi-month low at 0.7091.

Monday's hammer candle signaled that bears might be running out of steam, with profit-taking expected to accelerate recovery.

Former low of 05 Sep at 0.7144, marks initial resistance, with falling 10SMA (0.7187) marking the upper trigger, break of which is needed to ease bear-pressure and open way for stronger correction.

However, overall picture remains firmly bearish and sees risk of limited recovery before bears resume, with initial target at 0.7000 being in focus.

Res: 0.7144, 0.7187, 0.7235, 0.7250
Sup: 0.7091, 0.7022, 0.7000, 0.6954

West Texas Intermediate (WTI) crude oil futures have been moving sideways since the bounce off the 68.50 resistance level, which overlaps with the 38.2% Fibonacci retracement level of the downleg from 75.24 to 64.40. In the short-term, the RSI indicator is pointing upwards in the negative zone, while the blue %K line of the stochastic oscillator posted a bullish cross with the red %D line, signaling upside tendency in the 4-hour chart.

An extension to the upside and above the 68.50 resistance area could meet the 40-simple moving average (SMA) in the near term at 68.80. Further up, resistance could be found at 69.50, which is marginally below the 50.0% Fibonacci of 69.80. More advances could drive the oil until the 61.8% Fibonacci of 71.10.

If the price weakens and slips below 66.95, it could touch again the long-term ascending trendline near 66.00. Even lower, the 65.70 support level could attract greater attention as any leg below the diagonal line could create a bearish outlook, opening the way towards the 64.40 barrier.

To summarize, WTI crude looks neutral in short-term, while in the long-term picture is seen bullish since June 2016.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.15490
Open: 1.15913
% chg. over the last day: +0.29
Day's range: 1.15776 – 1.16288
52 wk range: 1.0571 – 1.2557

The EUR/USD currency pair has started growing. Yesterday, the growth of quotes exceeded 50 points. Today, the euro has continued to strengthen against the US dollar. At the moment, local support and resistance levels are 1.16050 and 1.16300, respectively. The potential for growth remains. We recommend opening positions from the key levels.

The news feed on 2018.09.11:

ZEW economic sentiment index in Germany at 12:00 (GMT+3:00);

JOLTS job openings at 17:00 (GMT+3:00).

Indicators point to the power of buyers: the price has fixed above 50 MA and 200 MA.

The MACD histogram is in the positive zone and continues to rise, which signals the bullish sentiment.

Stochastic Oscillator is located in the overbought zone, the %K line is above the %D line, which gives a weak signal to buy EUR/USD.

Trading recommendations

Support levels: 1.16050, 1.15800, 1.15650
Resistance levels: 1.16300, 1.16500, 1.16900

If the price fixes above 1.16300, further growth of the EUR/USD currency pair is expected. The movement is tending to 1.16500-1.16800.

Alternatively, the EUR/USD quotes may decline to the local demand zone of 1.15650-1.15800.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.29205
Open: 1.30236
% chg. over the last day: +0.77
Day's range: 1.30222 – 1.30874
52 wk range: 1.2361 – 1.4345

Yesterday, aggressive purchases of GBP/USD were observed. Demand for the pound has significantly increased after the statements by the European Union's chief Brexit negotiator. The official said that in the near future, the parties can reach a mutually beneficial agreement. At the moment, the GBP/USD currency pair is consolidating in the range of 1.30400-1.30850. The potential for growth remains. Positions should be opened from the key levels.

At 11:30 (GMT+3:00) investors will assess a report on the labor market in the UK.

Indicators point to the power of buyers: the price has fixed above 50 MA and 200 MA.

The MACD histogram is located in the positive zone and continues to rise, indicating the bullish sentiment.

Stochastic Oscillator is near the overbought zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.30400, 1.30000, 1.29700
Resistance levels: 1.30850, 1.31000

If the price fixes above the local resistance of 1.30850, further growth of the GBP/USD quotes is expected. The movement is tending to 1.31250-1.31500.

Alternative option. If the price fixes below 1.30400, we recommend looking for entry points to the market to open short positions. The movement is tending to the round level of 1.30000.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31566
Open: 1.31555
% chg. over the last day: -0.07
Day's range: 1.31312 – 1.31735
52 wk range: 1.2059 – 1.3795

The USD/CAD currency pair has started declining. At the moment, the key support and resistance levels are: 1.31200 and 1.31600, respectively. The USD/CAD quotes have the potential for further correction. Positions should be opened from the key levels. We recommend paying attention to the dynamics of oil quotes.

The news feed on the economy of Canada is quite calm. At 15:30 (GMT+3:00) data on housing starts will be published.

The price has fixed between 50 MA and 200 MA, which are strong dynamic support and resistance levels.

The MACD histogram is in the negative zone and below the signal line, which gives a strong signal to sell USD/CAD.

Stochastic Oscillator is located in the oversold zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.31200, 1.30700, 1.30250
Resistance levels: 1.31600, 1.32000, 1.32250

If the price fixes below the support level of 1.31200, the correction of the USD/CAD currency pair is expected. The movement is tending to 1.30800-1.30600.

Alternative option. If the price fixes above 1.31600, it is necessary to consider purchases of USD/CAD. The target level for profit-taking is 1.32000-1.32250.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.042
Open: 111.099
% chg. over the last day: +0.19
Day's range: 111.059 – 111.544
52 wk range: 104.56 – 114.74

The USD/JPY quotes show positive dynamics. At the moment, the USD/JPY currency pair is testing the key resistance of 111.550. The mark of 111.350 is local support. The trading instrument has the potential for further growth. We recommend monitoring current information regarding the trade conflict between the US and China. Positions should be opened from the key levels.

Today, the news feed on the economy of Japan is calm.

The price has fixed above 50 MA and 200 MA, which indicates the power of buyers.

The MACD histogram is located in the positive zone and above the signal line, which gives a strong signal to buy USD/JPY.

Stochastic Oscillator is near the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 111.350, 111.200, 110.900
Resistance levels: 111.550, 111.750, 112.000

If the price fixes above the resistance level of 111.550, further growth of the USD/JPY quotes is expected. The movement is tending to 111.750-112.000.

An alternative may be the decrease of the USD/JPY currency pair to 111.200-111.000.

Michael Barnier, the EU’s top negotiator on Brexit, called a reaching of the agreement on the deal within next 6-8 weeks realistic. This news supported the growth of the British currency, returning the sterling above 1.3040 of the dollar, to the highs since the beginning of August. The reaching of the agreement will reduce uncertainty around the British currency and cause a collapse of pessimistic positions that were betting on the development of the worst-case scenario.

Later in the day, traders with the British currency will also evaluate new employment and salary data. The proximity of Brexit begins to bite economic indicators, as we see a slowdown in the earnings growth, and the claimant count had increased by 108K or by 13.5% over the past 12 months by July. Thus, weak macroeconomics can quickly neutralize the positive impact of the news on the negotiations.

Asian bourses have been declining for the 9th trading session in a row, despite the fact that Trump has not announced new measures against the imports from China. MSCI for the Asia-Pacific region without Japan loses 1% this morning and has been trading at the lowest levels since last July. The Hong Kong index also loses in the morning, fixing a decline by 21% of the January’s peak levels. The bear market (a fall of more than 20% from the peak) is capturing more and more countries. In these conditions, the funds tend to further reduce positions in these markets, avoiding further losses, as the offensive phase of the bear market often follows a sequent long decline in quotations, often by 10-20%.

At the same time, the dollar index recedes under the pressure as the pound and the euro gains. The demand for European currencies has returned against the background of positive news about the negotiations on Brexit. As a result, EURUSD tries to gain a foothold above 1.16, and GBPUSD is above 1.3040. The Japanese yen weakens to the dollar following the growth of the demand for risky assets in developed markets, where futures on S&P500 add the second day in a row.

Yesterday, trading on the main currency pairs was very active. The dollar index (#DX) closed trading session in the negative zone (-0.22%). The British pound showed the best results. The GBP/USD quotes growth exceeded 120 points. Michel Barnier, the European Union's chief Brexit negotiator, said that in the near future, the parties can reach a mutually beneficial agreement. Investors continue to assess the risks of the trade conflict between the US and China.

Financial market participants expect the meeting of the Bank of England and the ECB. On Thursday, September 13, regulators will announce their decisions on the key interest rate. Today, investors' attention will be focused on the ZEW economic sentiment index in Germany and a report on the UK labor market.

At the moment, oil quotes are consolidating after a sharp decline during yesterday's trading. Futures for the WTI crude oil are testing a mark of $67.75 per barrel. At 23:30 (GMT+3:00) we expect statistics on the API weekly crude oil stock.

Market Indicators

Yesterday, the major US stock indices showed mixed results: #SPY (+0.17%), #DIA (-0.23%), #QQQ (+0.34%).

At the moment, the 10-year US government bonds yield is at the level of 2.94-2.95%.

The news feed on 11.09.2018:

Statistics on the labor market in the UK at 11:30 (GMT+3:00);

ZEW economic sentiment index in Germany at 12:00 (GMT+3:00);

JOLTS job openings at 17:00 (GMT+3:00).