European Open: Gold bugs eye a break above $2000

Asian Indices:

• Australia's ASX 200 index rose by 101.9 points (1.41%) and currently trades at 7,320.90
• Japan's Nikkei 225 index has risen by 351.26 points (1.29%) and currently trades at 27,984.92
• Hong Kong's Hang Seng index has risen by 12.48 points (0.06%) and currently trades at 20,343.68
• China's A50 Index has fallen by -45.45 points (-0.34%) and currently trades at 13,169.46

UK and Europe:

• UK's FTSE 100 futures are currently up 51 points (0.66%), the cash market is currently estimated to open at 7,792.56
• Euro STOXX 50 futures are currently up 26 points (0.61%), the cash market is currently estimated to open at 4,335.45
• Germany's DAX futures are currently up 105 points (0.67%), the cash market is currently estimated to open at 15,702.89

US Futures:

• DJI futures are currently up 46 points (0.14%)
• S&P 500 futures are currently up 4.5 points (0.11%)
• Nasdaq 100 futures are currently down -3.5 points (-0.03%)

• Australian consumer confidence rose to its highest level since June 2022 according to Westpac, although it remains 10.4% beneath April 2022 (the month prior to the RBA’s historic rate tightening cycle)
• Australian business confidence remained ‘resilient’ above its long-term average according to NAB, with softer price pressures also apparent in both business and consumer sentiment surveys
• Trade ties between China and Australia also continue to improve, with the two reaching a deal to resolve barley dispute and suspend a WTO case
• China’s consumer and producer prices continued to deflate with CPI falling to an 18-month low of 0.7% y/y, contracting for a second consecutive month at 0.3% m/m and PPI contracting -2.5% y/y
• AUD was the strongest major during a mild risk-on session overnight, which saw the Aussie nearly erase all of Friday’s losses and ignore rising geopolitical tension from within Korea
• North Korea are reported to have cut the phone link with South Korea (having ignored calls from the South over the past five days). North Korea also branded its neighbour as a “puppet traitor” for having held military drills with the US
• The FTSE 100 was the strongest major index last week, rising 2.19% and closing above the 2019 and 2020 highs on Friday

USD/CAD daily chart:

USD/CAD rallied for four consecutive days before forming a Doji yesterday, which closed back beneath the 100-day EMA and its high met resistance at a 38.2% Fibonacci retracement level and the 20 and 50-day EMA’s. We therefore may have seen a corrective high and are now looking for momentum to revert to its bearish trend. The bias remains bearish below 1.3560 and for a move towards 1.3400.

Gold 1-hour chart:

Gold has pulled back within a bearish channel from its 13-month high set last week, yet the price action appears to be corrective. Which is why we’re looking for momentum to turn higher. A bullish Doji (with lower spike) marks a potential low around 1980 which also coincides with previous consolidation zones. A bullish divergence formed with RSI (14), the RSI has broken above its prior cycle and a bullish engulfing candle formed on the 1-hour chart and also closed above the weekly pivot point. We’re now waiting for a break above the trend channel to assume bullish continuation and head for 2020. If geopolitical tensions continue to rise, perhaps gold will regain its safe-haven status and help the yellow metal move towards our target.

Economic events up next (Times in GMT+1)

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge