GBP’s Rally Continues, While Gold Price Action Lags

 

The trading week brought some interesting price action up to this point. On Monday, Janet Yellen, the U.S. Treasury Secretary, slammed cryptocurrencies, triggering a sharp selloff. The move lower triggered some nasty price action in the Nasdaq index which spell over some other indices too. 

Yesterday, it was Fed’s Powell “job” to fix the harm done by Yellen. He testified in front of the Senate Banking Committee, and, sure enough, during and after his speech, the markets bounced. The dollar reacted promptly, and it resumed its trend lower, with the 90 level a key one for the Dollar index.

European markets moved in a tight range, with main indices in the United Kingdom, Spain, or Germany closing with little or no change. Even today’s opening shows more of the same thing, so the chances are that the markets will wait for the opening of the North American markets for the next move.

Commodities are on a tear higher. Copper and oil lead the pack, while gold lags the movement. As such, commodity currencies like the Australian and Canadian dollars trade with a bullish tone.

Daily Analysis

Today the markets will focus on Powell’s second testimony, but the markets are already familiar with what he is going to say. The Monetary Policy Report Hearings will likely bring some volatility in an already bid British Pound, so that is another market to consider. Crude oil inventories do matter for the CAD traders as well as for those watching how crude oil struggles to hold above the $60 level.

Markets to Watch

Gold, GBPUSD, AUDUSD – the markets in focus today.

Gold Price

Gold failed to participate in the rally seen in the commodity markets. If anything, it diverges for everything in financial markets, as it remains in a downward channel. Sure thing, the current consolidation looks like a pennant formation, but such patterns work best during a rising trend – this one is not such a thing.

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Disclaimer: None of the content in this article should be viewed as investment advice or a recommendation to buy or sell. Past performance/statistics may not necessarily reflect future ...

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