Two trades to watch: EUR/USD, Gold

EUR/USD extends rebound from 15 month low. Gold struggles at 1800, US retail sales, consumer confidence in focus.

EUR/USD extends gains from 15 month low

EURUSD is pushing higher, extending gains from the previous session boosted by the risk on mood.

Fewer than expected US jobless claims & solid banks earnings lifted sentiment capping USD.

However central bank divergence remains a challenge for the pair with Fed set to start tapering, whilst ECB has refrained from hinting on when they might rein in support.

The Eurozone trades balance is due, in addition to inflation numbers from France & Italy.

US retail sales in focus. Consumer spending expected to drop 0.2% MoM.

Consumer confidence and Fed talk could also drive the pair

Where next for EUR/USD?

EURUSD is rebounding off 1.1525 the 15-month low a double bottom. The price has extended gains above the multiweek descending trendline and the 50 sma on the 4 hour chart.

The RSI is supportive of further upside.

Any move higher will need to retake the 100 sma at 1.1615 in order to extend the recovery towards 1.1640 the October high and 1.1690 the high September 28th.

On the flip side a move below the 50 sma at 1.1570 could open the door to a retest of the 15 month low at 1.1525.

EURUSD chart

Gold struggles at 1800, US retail sales, consumer confidence in focus

Gold is set to book gains this week over around 2.5%, its biggest weekly rise since May. The move higher in gold comes the week that inflation rose to 5.4% YoY and the minutes to the FOMC revealed that the Fed looks set to start tapering in November/ December.

The Fed is likely to hike rates once next year beyond those expectations are low.

US retail sales and university of Michigan consumer confidence could further drive the precious metal. Weak data could dampen expectations of a Fed rate rise and lift the precious metal.

Where next for Gold prices?

Gold price is extending its rebound off 1724, the October low. It trades with a two week ascending channel and at the upper band of this channel.

The price is running into strong resistance at 1800, the round number, 100 sma, the upper band of the rising channel and a multi-month trendline resistance which could be a tough nut to crack. A move above here could see buyers gain traction towards 1835 the September high.

Rejection at this level could see the price slip back to test 50 sma at 1777. A breakthrough here would expose the lower band of the rising channel at 1760. A move below 1646 horizontal support could see the sellers gain traction.

Gold chart

 

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.

 


 

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.