The mood across global equity markets brightened on Wednesday morning following reports that the United States and China were inching closer towards a trade deal.

Major Asian stock markets closed on a positive note while European shares rose for their fourth straight session this morning amid the renewed appetite for risk. With optimism over US-China trade talks boosting risk sentiment and encouraging economic data from China soothing concerns over slowing global growth, Wall Street is likely to open higher this afternoon.

AUDUSD rebounds on US-China trade hopes

The Australian Dollar aggressively appreciated during early trade amid mounting expectations over the US and China securing a trade deal.

With the Aussie leading gains among G10 currencies against the Greenback, bulls are clearly in the vicinity. When keeping in mind how the AUD is seen as a proxy to China’s economy, any signs of thawing tensions between the US and China then, in turn, alleviates downward pressure on the Australian Dollar, which is what the current price action indicates.

Looking at the technical picture, the AUDUSD is trading around the 0.71 level as of writing. A daily close above this level is likely to encourage a move higher towards 0.7140 and 0.7200, respectively.

Currency spotlight – GBPUSD

Sterling extended gains against the Dollar this morning as investors evaluated the risks of a no-deal Brexit following Theresa May’s call for a short extension to Article 50. As discussed yesterday evening, the GBPUSD has scope to push higher in the near term amid this welcome development. However, markets need to be mindful to exercise some measure of caution over the near-term, given the unpredictable nature of Brexit. It is worth noting that Sterling needs to be given the all clear by the UK parliament as well as EU officials, before pushing higher towards 1.3350.

Commodity spotlight – WTI Oil

It has been a positive trading week thus far for oil prices with WTI Crude pushing above $62.80 as support from OPEC-led supply cuts and U.S. sanctions eased oversupply concerns. While this theme is likely to support oil prices in the short term, the medium to longer term outlook remains influenced by global growth concerns, rising production from US Shale and the Dollar’s valuation. Taking a look at the technical picture, WTI Crude is bullish on the daily charts. A solid daily close above $63 is likely to open the doors towards $65.

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