Chinese stocks gain on speculation of further support

Chinese stocks headed higher during overnight trading on heightened speculation that the government would take action to support markets. Both the CSI 300 and Shanghai Composite posted substantial gains, adding almost 2% apiece after President Xi Jinping outlined in a statement released over the weekend that China remains in a “significant period of strategic opportunity”.

Spot gold prices slipped lower throughout Asian trading, testing support levels towards $1,280/oz as investors piled into equity markets and risk optimism improved. Prices have been testing the 100 day MA, currently at $1,289.43/oz, frequently over the past few sessions with intraday dips below this level of support struggling to swing momentum towards the downside. After a brief rally above $1,300 as prices tested resistance towards the 50 day MA around $1,310/oz prices have seem to be trading in a tighter sideways pattern. 

The euro traded towards a four week low on Friday after touching a two and a half year high earlier in the week. The currency shed almost 1.7% against the dollar on Thursday and Friday, pulling back towards support at the 100 day MA as it ended the week at 1.3745. The yen continues to trade without conviction currently around 101.90, having settled into a tight range since mid-April as investors look for further signs of improving economic conditions.   

Gold prices ended the week lower, finding support towards $1,290/oz

XAU Curncy Gold Spot Oz D 2014 05 12 07 36 43

EUR slips to a four week low against the dollar

EUR Curncy Euro Spot 2014 05 12 07 44 41

JPY struggled with direction, holding firmly within 30 day range 

JPY Curncy Japanese Yen Spot 2014 05 12 08 18 51

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Topics: Gold, EUR, JPY
More from: Kash Kamal