Gold is once again trading near annual highs, amid a weaker dollar and rising demand for safer assets.
The optimism of financial markets on the resumption of trade negotiations between the US and China did not last long, because at the beginning of this week, the focus of investors is already on a new trade conflict - between the US and the EU. According to media reports, the United States is considering the introduction of duties on European goods as counter step for EU subsidizing the aircraft manufacturer Airbus. Fearing a worsening of the situation in international trade, investors are abandoning risky assets and again buying gold and Japanese yen.
This morning, additional pressure on stock exchanges was caused by weak statistics from China. According to the Caixin report in June, PMI in the services sector was 52.0 points, against 52.7 previously.
In addition to trading news, today investors will closely monitor US statistics, where ADP non-farm employment data, the trade balance report and ISM non-manufacturing business index for June are expected to be published. According to all indicators, experts predict the publication of weaker data, which may put pressure on the dollar during the American trading session.
It is also worth considering that today the financial exchanges will be closed earlier in the United States on the eve of the Independence Day celebrations.
On the chart, the price again tests the level of 1436.00 for strength, but so far the bulls fail to break through it, therefore, we consider the scenario with the development of a corrective movement in the direction of 1403.00 as a priority.
Resistance Levels: 1429.00, 1436.00, 1445.00;
The levels of support: 1421.00, 1403.00, 1383.00.
The main scenario - consolidation below 1421.00 and a decline to 1403.00.
An alternative scenario - the breakdown of resistance at 1429.00 and an increase to 1445.00.
A positive news background locally dominates the market, which contributes to the development of an upward movement. But now the price has reached a very strong resistance level, 1436.00, from which we can expect the development of a correctional wave. Therefore, intraday preference is given to shorts that should be considered from the level of 1429.00.