Is China and the US getting closer to a partial deal?

According to China’s Ministry of Commerce notes made in the past weekend, the discussions between the two sides aiming at a partial agreement, have been completed successfully, to some degree. China is doing everything possible to remove US tariffs expected on the 15th of December. Some analysts claim that there is some chance for the two sides to sign a partial deal (phase 1) during mid-November. It is said that China has made some amendments on Currency and Intellectual property rights maters but none of them come close to what the US requested. Even though this update is positive for both Washington and Beijing, the matter still remains generally unresolved and any updates could provide volatility for safe haven assets like XAUUSD and USD pairs. Furthermore, XAUUSD initially had a strong upward momentum on Friday and managed to break out the sideways motion it was trading in, between our (R1) 1509 resistance level and our (S3) 1483 support level. The precious metal moved higher and even tested our (R2) 1517 resistance level but was unable to break above it. However as more reports surfaced the market, implying the US and China could possibly sing a (phase 1) deal, traders found reason to short the shiny metal sending it back below both our (R2) 1517 and (R1) 1509 resistance levels, moving closer to the (S1) 1500 round number threshold. It is currently trading between the (R1) 1509 resistance level and the (S1) 1500 support level. In addition, XAUUSD broke the downward trend line formed since the 5th of September leaving some possibility for the bulls to make a return. Yet, if the fundamental drivers, like the US Sino matter continue to move in positive directions, Gold may head even lower and test our (S2) 1495 or even the (S3) 1483 support levels.

More coming up for the British Pound

With a no deal Brexit deal still not removed completely from the UK’s side, more uncertainty prevails on the matter. Today UK PM Boris Johnson will put forward an election motion for the 12th of December, in order to attempt to get passed the deadlock he faced on his Brexit deal last week. Many analysts believe he will continue to get opposition from the Labour party making it almost impossible for him to get the two-thirds majority needed. Despite the situation in the UK remaining in uncertainty, reports indicate that European leaders may compromise a three-month extension to 31 January 2020.The pound is expected to react to headlines today while volatility may increase as we get closer to Thursday the 31st of October which is the date that Boris Johnson has repeatedly promised to get Brexit done. In any case, technically Cable remains in downward momentum since the 21st of October. The pair has shown signs of stabilization for the time being, just between our (R1) 1.2885 resistance level and our (S1) 1.2760 support level. In our view however, if the fundamental updates do not point to a Brexit deal then the pair may remain in a downward movement. If Cable continues to drop, it could aim for our (S1) 1.2760 support level that was last tested on the 17th of October and the days just before that (15th / 16th). A drop below that level could send GBP/USD even lower for the (S2) 1.2640 support level. In the opposite direction, if Cable is to move higher then it could break above the (R1) 1.2885 resistance level. If the bulls are strong enough, then the next possible level could be the (R2) 1.3015 resistance barrier which is the highest price reached since May the 13th when the price was last seen.

Other economic highlights today and early tomorrow

Today we get from the US, the Adv. Goods Trade Balance for September. Tomorrow in the early Asian session we get Japan’s Tokyo CPI and Core CPI rate both for October

XAU/USD 4 Hour