Investor focus shifted away from the economic calendar yesterday with attention diverted towards the growing diplomatic crisis after a Russian jet was downed by Turkey near the Syrian border. Although the equity markets have not been heavily affected due to the recent geopolitical developments, there is some anxiety being shown, and the markets slipped following the abovementioned news. The FTSE100 later clawed back its losses, while demand for the Japanese Yen and Gold improved slightly.
Elsewhere, optimism has increased further over the probability of a US interest rate rise in December after GDP growth in the United States was revised higher at 2.1%. Investors will now await the release of the Durable Goods data on Wednesday, where a strong reading will provide further confidence to the expectations of a US interest rate increase in December.
Gold bounced further away from its milestone five-year lows with the metal jumping higher on geo-political tensions. Gold trading has been dictated by US interest rate expectations throughout 2015 and is still fundamentally bearish. With the Fed futures illustrating a near 80% probability that the central bank may raise US rates in December, this relief rally in Gold may offer an opportunity for bearish investors to send this yellow metal towards the $1050 level and possibly lower.
Commodity spotlight – Gold
Gold is technically bearish on the daily timeframe as there have been lower lows and lower highs. Prices are trading below the daily 20 SMA and the MACD still points to the downside. The $1085 regions may act as a dynamic resistance which may invite an opportunity for sellers to send prices back down towards the 5-year lows around $1065.
The NZDCHF is in the process of turning bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has crossed to the upside. A breakout above 0.6700 may invite an opportunity for buyers to send prices towards 0.6850.
The renewed risk-off environment has punished the value of the Sterling. This pair is in the process of turning bearish on the daily timeframe. A solid breakdown below the 184.50 may invite a further decline to 182.50.
This pair is technically bullish on the daily timeframe. The previous resistance at 88.30 may act as a dynamic support which may encourage buyers to send prices towards 89.50. Prices are trading above the daily 20 SMA and the MACD has also crossed to the upside.
The EURGBP is technically bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. As long as prices can keep below the previous lower high of 0.7100, there may be a further decline back down to 0.6980.
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