Gold looks to $1855 despite weak US CPI data. GBP/USD reaches fresh multi year highs over 1.38.

Gold picks up off session lows, $1855 in focus 

Weaker than expected CPI data for January added pressure to the precious metal overnight, a traditional hedge against inflation. 

Federal Reserve Chair Jerome Powell also warned that the US jobs market was a long way from recovery, the weaker USD (UDN) offers some support to the precious metal 

Attention turns to US jobless claims due later today which are expected to show 757k initial claims vs 789k from last week 

The absence of Chinese / Japanese traders could keep trading quiet. 

Gold technical analysis 

After a weaker session overnight Gold is picking up off session lows of $1835 and attempting to head back over the flat line.  

Whilst Gold (GLD) trades below its 200 sma, the longer-term trend remains bearish. Gold tested its 200 sma at 1855 yesterday before rebounding lower to $1835 overnight.  

The price has since picked up off session lows and is currently attacking the 20 sma resistance at $1842. A push over this level could support another test of the key 200 sma resistance at $1855  with a move beyond here negating the bearish trend whilst bringing $1875 into target. 

A close below $1842 could keep gold sellers hopeful and $1785 the monthly low into focus. 

GBP/USD hits fresh multi year high over 1.38 

UK’s rapid vaccine rollout supports sterling (FXB).  

Brexit concerns could limit gains, after BoE Governor Andrew Bailey warns over the EU cutting the UK off from its financial markets 

Powell keeps pressure on the US Dollar reiterating the Fed’s support. 

US jobless claims due later today which are expected to show 757k initial claims vs 779k from last week 

Q4 UK GDP data tomorrow 

GBP/USD technical analysis 

GBP/USD struck another multi-year high of 1.3866 overnight and trades higher for a 6^th consecutive session. 

On the 4 hour chart the trend remains bullish supported by an ascending 20 & 50 sma. The RSI is supportive of further gains. Immediate resistance is seen at 1.39 round number ahead of 1.3970 the early April 2018 low and ahead of the key psychological 1.40 level. 

It would take a fall below 1.3760 January’s high for more bears to risk entry and target the 20 sma at 1.37 prior to 1.36 the 50 sma.