Gold bears cast aside all doubts today as it threw the bulls aside and plummeted on the charts on the back of semi positive core CPI data coming in at 0.2% m/m. This was expected but the drop on the charts was sharp and semi expected as gold has been in a bearish trend for some time, the question is where does this leave the precious metal now. Is there hope of gold bulls returning, I think not given the bullish stance the FED has taken as of late, so for the time being it's possible we see the markets look to take control and force down gold.
Currently the next level of support has not been seen since 2010 when gold was jumping up the charts, but now it's looking more and more likely to be around 1041 at this stage. For the most part the USD has remained relatively upbeat despite the average forecasts and for the time being markets believe the FED is likely to act and we could see gold fall further.
Across the channel the GBPUSD has been a funny one as over the long term it looks stuck in a bearish channel as it slips down the charts, but it has so far tried to fight back. Albeit futile as the current 20 day MA has so far defeated any bullish movements higher. The market is stoped at resistance at 1.5225 at this stage and looks unlikely to budge higher given the recent strong USD results.
What is looking more and more likely is that given the UK's CPI reading today that came in at -0.1% we are going to see the GBPUSD continue to come under pressure for the most part, and I fully expect a fall to support at 1.5029 is certainly back on the cards given the weakish nature of the pound and how strong the US market is at present. Any further falls past this point are most likely to be met by strong support at 1.4900 and the market is likely to try and hold this level as a push through 1.500 represents a push across the threshold which has held for some time.
The NZDUSD is the last one I will discuss and it's not looking good at all. Despite the recent talk from the RBNZ about cutting rates, milk prices have so far dropped further and the recent fall of 7% is likely to have a large impact on the bottom line for primary producers in New Zealand. Markets have pushed down to support at 0.6443 at this stage and I'm fairly certain we could see further falls given the weakness in the commodities index at present and also the lack of demand for the NZD which is seen as risk in the fixed commodities section at present.
Further drops for the NZDUSD are likely to meet strong support at 0.6315 and any further drops through here would signal a push into the high 50 cent range at present. I for one would expect to see a RBNZ cut before any further large movements occur.
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