Date: 28 Jun 2019

Global leaders gather in Osaka, Japan today, in what promises to be the most widely-anticipated G20 summit since the depths of the financial crisis of 2008. Topics on the agenda for discussion include trade, climate change, currencies and the ongoing stand-off between the United States and Iran in the Persian Gulf.

United States President Donald Trump’s scheduled meeting with Chinese President Xi Jinping on Saturday is expected to be the highlight of the G20 summit. Expectations are high that a trade deal or indeed a trade truce can somehow be struck when the two leaders meet, leaving traders on edge going into the weekend.

Financial markets are also braced for comments on currencies this weekend, particularly President Trump’s thoughts on the current strength of the U.S Dollar and other nations purposely weakening their currencies. The U.S President has reportedly been scathing about the European Central Bank’s desire for further policy assistance as it would help to keep the EUR/USD exchange rate undervalued.

The implications for the greenback are clear if President Trump boldly states his preference for a weaker U.S Dollar and series of rate cuts from the Federal Reserve this weekend. Central banks are currently engaged in a race-to-bottom, as they cut interest rates to stimulate growth and help exports.

Oil prices are also likely to remain volatile if we fail to see global leaders helping to sooth the worsening situation in the Persian Gulf between Iran and the United States. China has vested interested in keeping the region conflict-free, as a large number of the nation’s imports pass through the area known as the Strait of Hurmuz.

 

old Daily Mountain Chart Source ActivTrader Platform

Gold Daily Mountain Chart |Source: ActivTrader

 

Gold is almost certainly the asset class of choice for traders looking to trade any bearish news coming from the G20 meeting this week. Gold has been well-support by the $1,400 level during the most recent technical correction, with bulls currently probing the upside. Key upside targets are found at the $1,450 and $1,485 levels, with extended resistance just above the $1,500 level. To the downside, a break of the $1,400 level may inspire a technical test of the $1,385 to $1,360 support region.

 

Written by Nathan Batchelor, External Analyst, ActivTrades

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