The new week starts in risk-off mode

Monday has brought selling to nearly each asset class – equities were down circa 1% during the London session, metals plunged much more, confirming their bearish trends, and the USD was also trading weaker against most of its counterparts.

It looks like the EURUSD pair will breach the 1.20 resistance this week as the dollar index has fallen below a long-term uptrend, implying further weakness for the US dollar. What is strange is the massive drop in precious metals, which usually rise when the dollar declines. 

From other news, Britain and the European Union are heading into a “very significant” week, British foreign minister Dominic Raab said on Sunday, with great differences over a trade deal yet to be resolved. 

Nevertheless, both the euro and the Pound are climbing higher nearly every day, capitalizing on the broad US dollar weakness.

Earlier in the day, Chinese PMIs showed another improvement, suggesting the Chinese economy is holding firmly in the expansion territory. 

There are no other major macro data planned for today, with sentiment being the only dominant driver today. However, the dip in equities will most likely be bought later in the day, while the USD might continue to drift lower.

Source: https://www.axiory.com/market-news/the-new-week-starts-in-risk-off-mode