Based on the early price action, the direction of the April Comex gold market the rest of the session on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at $1590.30.
The British pound is starting to regain some upward momentum although the Bank of England meeting later this week will ultimately dictate the direction for the pair.
Risk assets are displaying volatile price swings at the weekly open as the Coronavirus threat has escalated. EUR/USD, on the other hand, has not been impacted and last traded unchanged on the day.
As the Asian markets opened on late Sunday, traders expected a reactionary price move related to the threat of the Wuhan virus and the continued news of its spread.
GBP/USD made a bearish bounce at the 61.8% Fibonacci level, which seems to confirm the wave D of a larger contracting triangle pattern.
Based on the early price action, downside momentum is driving the trade. This should lead to a test of an uptrending Gann angle at .6772.
Dear Traders, So far in 2020, the GOLD has been the best market to trade. Buy the dip has been the best possible scenario. We still have that scenario playing out.
The British pound is steady at the start of the week. The Australian and New Zealand dollars are trading at multi-week lows, as the China coronavirus has raised investor risk apprehension.
WHO decision should trigger a volatile response in financial markets and is likely to determine the direction of global stock markets over the near-term.
News over the weekend was mainly surrounding the spread of the new coronavirus, which has left risk extremely prone and sent the FTSE China A50 through the trap door to the tune of a 5 % markdown.
Investing.com - The Japanese yen is in demand Monday as traders flock to the safe haven currency amid concerns over the spread of the pneumonia-like virus in China.
The majors make an early move to bring resistance levels into play. A move back through early highs would be needed, however, to support further upside.
Since the Fed is not likely to offer any surprises, the focus this week will remain on the economic impact of the coronavirus.
The emphasis this week will be on safety. Given the worsening coronavirus problem, I expect global stock markets to open sharply lower and the Japanese Yen to spike higher as investors seek safe-haven protection.
Traders are going to continue to debate whether the RBA and RBNZ should cut rates in February, but last week’s economic data has cooled thoughts of automatic cuts.
The early direction on Monday will be determined by trader reaction to the short-term 50% level at $1581.20.
Policymakers are expected to signal that rates are “likely to remain appropriate” at their current level, as long as the economy doesn’t change significantly.
It’s a big week ahead. Britain leaves the EU, Trump’s defense team is in action, corporate earnings are in focus, and the FED and the BoE are in action.
Given the downside momentum by the Euro on Friday, we’re looking for sellers to go after the Fibonacci level at 1.1017 early Monday.