Gold is struggling for direction after having its best week since 2008 as investors await new economic data to access the damage caused by the novel coronavirus outbreak.
The precious metal should remain confined in a narrow range until a fresh directional catalyst is brought into the picture. Should the Dollar regain footing on risk aversion and global recession fears, this may obstruct Gold’s upside potential. Looking at the technical picture, prices could jump higher towards $1675 if a solid daily close above $1630 is achieved. Alternatively, sustained weakness below may pave open the doors back towards $1600.
GBPUSD pushes back above 1.2450
A depreciating Dollar propelled the GBPUSD to a fresh two week high above 1.2450 last week.
Given how this move was heavily based around the Dollar’s valuation, the upside will be limited if the Greenback recovers in the week ahead. The fundamentals weighing heavily on the Pound remain intact and this should promote further weakness in the future.
Focusing on the technical picture, the GBPUSD is experiencing a technical rebound on the daily charts with prices trading around 1.2400 as of writing. A breakdown below the 50% Fibonacci level, could trigger a decline towards 1.2200 and 1.2050.
Dollar enters the week with a smile
The mighty Dollar entered the week with a spring in its step as risk aversion sent investors rushing towards the world’s most liquid currency.
Appetite towards the Greenback should remain supported by coronavirus fears and global recession fears. Expect the currency to push higher ahead of the US jobs report on Friday which could spark volatility across financial markets.
In regards to the technical picture, the Dollar Index is experiencing a rebound on the daily charts. A solid daily close above 99.00 could trigger a move towards 99.90. If 99.00 proves to be strong resistance, prices could decline back towards 98.40.
Commodity spotlight – WTI Oil
Oil has descended deeper into the abyss, tumbling to levels not seen in more than 17 years as the aggressive price war between Saudi Arabia and Russia compounded to the impacts of the pandemic.
At this point in time, it is difficult to predict any floor on Oil with further downside expected if the supply and demand dynamic do not change.
Focusing on the technical, a picture is worth one thousand words. Is WTI Crude approaching $15 on the monthly timeframe? Time will tell.
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