Gold Price Remains Unstoppable And The Greenback Gains On Brexit Worries
London (Jun 12) This past week has seen the RBA and RBNZ remain on hold with less dovish than expected statements. This helped the two high yielders gain against the USD throughout the week, before pulling back into the Friday close on 'Brexit' fears after the latest ORB poll release showed the 'Brexit' camp having a wide lead over the 'Bremain' camp. This also helped to fuel gold's rally which has been unstoppable this past week, with very shallow pullbacks before further gains.
This coming week brings the all important FOMC rate decision where no hike is expected. However, market participants will be focused on the accompanying statement to see if suggestions are present for a rate hike in July. Whilst the most recent Non-Farm payroll data has been disappointing, wage increases, a low unemployment rate and strong data points such as housing suggest the U.S. economy is doing well at this time, and a rate increase is warranted in the not too distant future.
Trading and Technical Strategy for the week ahead:
EUR/USD Bearish Bearish Bearish Bearish Bullish
AUD/USD Bearish Bearish Bullish Bias being challenged Bullish Bias being challenged Bearish Bias being challenged
NZD/USD Bearish Bullish Bearish Bias being challenged Bullish Bias being challenged Bullish
GOLD Bullish Bullish Bias being challenged Bearish Bullish Bias being challenged Bullish Bias being challenged
WTI OIL Bearish but improving Bearish Bearish Bearish Bullish Bias being challenged
The EUR/USD came off the 1.1417 resistance and has two paths set before it. A break of 1.1095 to the downside will see the pair quickly accelerate to the downside, where a break of 1.1000 could signal the start of the next larger move down. Whilst a break of 1.1417 to the upside could signal the current uptrend move to 1.1775 and higher has resumed.
The one thing though that is clear to us about the EUR at present is that very little of the current 'Brexit' risk is priced into the currency relative to the Sterling Pound (NYSEARCA:FXB) at this time. With the latest ORB polls indicating that the leave camp now has 55% vs. the stay camp at 45%, this could certainly turn into something most are not expecting with an actual unexpected 'Brexit' occurring, which would undoubtedly affect the Eurozone and the EUR in turn.