The US-China negotiations in Stockholm ended with no practical results. The main point that still remains unsolved is the demand that China stop purchasing Russian oil. Chinese officials protect their position, saying that they will buy oil from any country to serve their national interest.

The previous deal between both sides was concluded almost three months ago. The deadline for the next truce is August 12. While there is still a week remaining until the end of the previous deal, the lack of agreement may put pressure on the financial markets.

Anyway, both sides are signaling optimism over the possibility of making another deal before August 12. Otherwise, 100% tariffs will come back from both sides, which may have a negative impact on both economies.

EUR/USD: The Euro Is Struggling to Recover

Friday’s US labor market data was disappointing as the unemployment rate reached 4.2% and the number of new jobs created in July was below 100K. Moreover, June and May’s readings were also downgraded. Donald Trump fired the Head of the US Bureau of Labor Statistics after the data was released. This brought some volatility to the financial markets. 

Moreover, the Fed remains under pressure. On Friday, Adriana Kugler resigned from duty at the Federal Reserve, and now market participants are looking for some clues on who may be her successor. One thing is clear – Donald Trump will appoint a person who will vote for new rate cuts. 

On the Euro side, the latest data from the Eurozone was disappointing, showing that the producer prices rose by 0.8% only, while it was expected that they would reach a 0.9% growth in July. Sentix Investor Sentiment in the Eurozone also declined to the negative zone, which puts additional pressure on the Euro. 

From the technical analysis perspective, EUR/USD is trading close to the SMA50, testing the moving average, which means that there is no dominating side currently. Sellers can engage from 1.1510, which is the current local support level targeting 1.1440-1.1430. On the upside, buyers can purchase the currency pair if it moves above 1.1600, which is the local resistance level, targeting 1.1660-1.1690. 

GBP/USD: The British Pound Holds Steady Ahead of the BoE Meeting

The UK currency stays in a narrow range as market participants focus on the upcoming Bank of England meeting that will take place on Thursday. While another rate cut is beyond doubt, traders and investors will wait for what the official says about the future monetary policy steps this year. During the last meeting, the Head of the Bank of England mentioned that the central bank will stick to the gradual and cautious approach, which means that not many rate cuts should be expected in the remainder of the year.

From the technical analysis perspective, the GBP/USD currency pair is trading in a narrow range slightly above the SMA50, which means that the market is still evaluating the upcoming BoE meeting without choosing a particular direction. Buyers can search for trading opportunities at 1.3300 targeting 1.3380 and 1.3440. On the downside, sellers can find entry points at 1.3220 targeting 1.3140. 

XAU/USD: Gold Retraces Back from Local Highs

The US dollar makes attempts to pare losses from Friday’s sell-offs after the disappointing US labor market data and the resignation of the US Bureau of Labor Statistics chief that followed the revision of June and May’s data. 

Demand for gold decreased as market participants positively embrace the negotiations and trade deals that the US has already concluded with its major peers. This means that XAU/USD may continue to lose positions in the upcoming days. However, any further instability in the US political system may lead for another upzide burst. 

From a technical analysis perspective, gold is trading slightly below the SMA50, demonstrating a switch to the bearish sentiment. Short positions will be preferable after gold breaks below 3,340, targeting 3,300. On the upside, buyers can engage at 3,3880 targeting 3,400-3,420. 

WTI Oil Loses Ground as OPEC+ Increases Output in September

WTI continues to slide down as the fundamental environment is still unfavorable for energy commodities. OPEC+ announced on Sunday that the cartel will increase its output in September by 547,000 barrels daily to cover possible sanctions against oil coming from Russia. However, the downside may be limited due to rising expectations of the interest rate cuts by the Fed in September. About 80% of market participants anticipate the Federal Reserve to cut rates by 25 basis points in the first month of fall.

From the technical analysis perspective, oil is trading far below the SMA50, confirming the bearish bias. Sellers can trade along the descending trendline using the swing strategy approach. They can enter at 64.70, targeting 63.90. On the upside, buyers can open long trades at 65.70, targeting 67.90 and 68.70.