U.S-China trade deal and GDP data for the world’s major economies in focus this week

The US dollar was the growth leader in the foreign exchange market last week. This is due to rising hopes about the U.S. – China trade deal and a string of solid U.S. economic data. China and the United States have agreed to roll back tariffs on each others’ goods in a “phase one” trade deal if it is completed, officials from both sides said on Thursday. However, there is still some scepticism about a trade deal as officials inside and outside the White House have bristled at the notion of giving up punitive tariffs.

The euro has also traded weaker since last Thursday morning when the European Commission’s forecast reflected low expectations for the kind of fiscal stimulus that many, including the European Central Bank and International Monetary Fund, say is needed to revive the Eurozone economy.

The EUR/USD pair keeps trading within the bearish trend after a small consolidation. Our target for the next week is 1.0950.

Gold hit its three-month lows last Thursday and headed for its worst week since 2017. This is also due to the U.S. – China trade deal and lower demand for safe haven assets. Gold is likely to continue its the downward trend this week after a short consolidation around 1410.65 mark.

Traders will get an update on the world’s major economies: news from the UK will come in on Monday, from Germany, Eurozone and Japan on Thursday (GDP figures). The U.S. is to release inflation data on Wednesday and retail sales and industrial production data on Friday. We also expect appearances by a host of several Fed officials.

Trump will deliver remarks at the Economic Club of New York with markets hoping for more clarity on a planned “phase one” for a U.S. – China trade deal on Tuesday.
The Federal Reserve Chairman Jerome Powell will be speaking about the Central bank’s outlook on the economy, inflation and monetary policy on Wednesday and on Thursday. He is expected to reiterate that plans for further easing are now on hold after the Fed cut rates last month for the third time in as many meetings.
The Reserve Bank of New Zealand will announce its Interest Rate Decision on Wednesday. The key rate is expected to be cut from 1% to 0.75%.

To sum up, here are our targets for:
EURUSD – sell up to 1.0950
XAUUSD – sell up to 1410.65

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