The spark of confidence investors have acquired for the global economy following the sharp bounce in the stock markets has dampened appetite for safe haven assets and as such has consequently left Gold under pressure. Prices have found it increasingly difficult to breach above the $1110 resistance while Dollar appreciation has obstructed any attempts for a solid recovery in the commodity. While we remain fundamentally bearish on Gold, the technicals are also starting to tilt towards the direction of the bears. The MACD seems to be losing momentum and prices have edged closer to the daily 20 SMA. A solid weekly close back below $1090 should encourage a further decline towards $1075 in the new trading week.
The effect of Mario Draghi’s dovish rhetoric continues to empower the Euro bears and this can be reflected in the sharp decline which the EURGBP has experienced today. Despite the heavy declines, previous resistance at 0.7500 should act as a dynamic support which should encourage bullish investors to send prices back up. From a technical standpoint, the EURGBP is still heavily bullish as prices are trading above the 20 SMA while the MACD crosses deep into the upside. The EURGBP may be able to trade back towards 0.7600 on the condition that prices do not dip below 0.7450.
The GBPJPY has enjoyed an extended period of declines and this correction may offer an opportunity for bearish investors to reinvest at higher prices. Fundamentally the Sterling is heavily bearish and fading expectations around the Bank of England raising UK interest rates in the near term has left the single currency vulnerable. Prices may continue to rise towards the daily 20 SMA around 172.50 before bears take the front seat and send the pair lower towards 166.00. Technical indicators such as the MACD and daily 20 SMA currently suggest that the GBPJPY still has more downside momentum.
Despite the AUDUSD posting almost 5 consecutive days of gains, the pair is still bearish on the daily timeframe in the bigger picture. Prices are trading below the daily 20 SMA while the MACD has also crossed to the downside. The 0.7000 seems like a pivotal region and if bears can defend this level then more downside may be expected towards 0.6850 in the new trading week.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.