Asian equities roared back to life during early trading on Monday after oil's sharp appreciation boosted global sentiment and rekindled risk appetite. European shares were mostly mixed as investors attempted to look beyond the political turmoil in Washington to focus on the macrofundamentals in Europe. With concerns regarding Donald Trump's presidency slightly easing and some still optimistic for his pro-growth policies, Wall Street is likely to receive some minor support this afternoon.
Dollar bears remain relentless
The Greenback was "Trumped" last week with prices struggling to recover from six-month lows as investors re-evaluated the ramifications of the political instability in Washington and the impact it will have on Trump's pro-growth policies. With the Dollar-Inspired Trump rally relinquishing all gains amid the growing uncertainty, bears are truly back in town. Much attention will be directed towards former FBI director James Comey's pending public testimony, which should expose the Dollar to further downside shocks if any new information is brought to the table. On the macro front, the Federal Reserve minutes and US GDP will steal the limelight with investors heavily scrutinizing both for further clues on rate hike timings this year.
GBPUSD breaks above 1.3000
Sterling bulls have effortlessly exploited the Dollar's weakness to elevate the GBPUSD above the stubborn 1.3000 resistance. With UK politics and Theresa May back in focus this week, the upside is likely to remain limited with Sterling instore for some fresh punishment.
There is still a strong sense of uncertainty over the pending Brexit negotiations, while suspicions of the European Union playing hardball in the talks should expose Sterling to further losses. With the pending second estimate GDP for the first quarter of 2017 likely to be unrevised, the main event risk for Sterling this week should be the inflation report hearings on Tuesday where BoE Mark Carney testifies on inflation and the economic outlook before the Parliamentary Committee.
OPEC meeting in focus
Oil prices have ventured higher on Monday as optimism continues to sharply rise over big oilproducing countries extending output cuts to balance the markets. Although markets widely expect a meeting between OPEC and Non-OPEC members on May 25 to conclude with the current output deal extended by another 9 months, it remains a question of how U.S Shale reacts. The price action observed in oil markets suggests that prices remain entangled in a fierce bout with OPEC bulls and U.S Shale bears. While prices could edge higher following the extension of the production cut deal, the upside should face headwinds if U.S Shale continues to pump oil incessantly into the already oversaturated markets.
Commodity spotlight – Gold
The Trump woes have turbocharged Gold bulls this month with the yellow metal trading around $1254 as of writing. With political unrest in Washington hastening the flight to safety, investors sprinted to Gold as a form of protection. The yellow metal is in the process of turning bullish on the daily charts and a vulnerable Dollar should inspire bulls to conquer $1260. From a technical standpoint, a breakout above $1260 may open a path higher towards $1275.
Disclaimer:This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended Content
Editors’ Picks
![EUR/USD stays below 1.1100, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/european-euro-coin-on-top-of-american-dollar-bill-11292130_XtraSmall.jpg)
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
![GBP/USD struggles to find a foothold, trades near 1.3150](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-157771037_XtraSmall.jpg)
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
![Gold retreats toward $2,500 ahead of the weekend](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
![Week ahead – Investors brace for NFP amid Fed rate cut speculation](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/america-back-to-work-gm178972493-25143312_XtraSmall.jpg)
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
![Easing Eurozone inflation to back an ECB rate cut in September](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/Eurozone/eu-flags-flying-at-the-european-commission-building-brussels-belgium-24759579_XtraSmall.jpg)
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.