After rallying more than $165 since November, gold is taking a well-deserved breather. A brief pause, then gold should continue to fresh highs and $1700 by March.
Gold markets rallied slightly during the trading session on Friday to in the week, showing signs of resiliency yet again. It looks as if we are very comfortable with the bullish uptrend.
The gold fell a bit during the week, but then turned around to show signs of life again. We are above the $1550 level, but also have a shooting star above.
The US dollar broke above the ¥110 level during the week but continues to struggle above there. That being said though, this is a market that looks as if it is ready to go higher over the longer term, as we are now above the 200 week EMA.
The British pound went back and forth during the course of the week, as we get a lot of push back and forth from both buyers and sellers. The Friday session had a very poor retail sales figure release, and that of course weighed upon the market.
The British pound rallied against during the trading week to break above the 200 week EMA against the Japanese yen. This is a be decidedly “risk on” move, but there is a lot of noise above that will continue to make this messy.
The Euro tried to rally during the week but ran into a lot of trouble at the 50 week EMA. At this point, the market looks very likely to continue to drift a little bit lower, as we are in the middle of a larger range.
The Australian dollar went back and forth during the course of the week, trying to break out to the upside but then pulling back. Ultimately, this is a market that will be paying attention to Asia, because that will give Australia its clues.
The US dollar rallied a bit during the trading session against the Japanese yen, as we have broken above the ¥110 level. However, it doesn’t look like we are in a hurry to go anywhere right now.
The British pound pulled back after initially trying to rally during Friday as the retail sales numbers were miserable in the United Kingdom. That being said, we are still very much in an uptrend and it will be interesting to see whether or not we can continue.
The British pound did get a bit of a shock during the trading session on Friday as retail sales missed the expected figures. That being said, it looks as if the market is ready to recover.
The Australian dollar continues to be very choppy and noisy right around the 200 day EMA, an area that will cause a lot of attention for longer-term technical traders.
* Chile's peso gains on higher copper prices * Latin American FX index climbs after two days of declines * Brazilian miner Vale hits over one-year high * Mexican peso, Peruvian sol, Colombian peso firm By Sagarika Jaisinghani and Ambar Warrick Jan 17 (Reuters) - Gains in the Chilean peso lifted Latin American currencies on Friday, as stronger-than-expected economic data from China added to optimism about faster global growth in the wake of a Sino-U.S. trade truce. Chile's peso was on track for its best day in more than a week as a surprise acceleration in Chinese industrial output sent copper prices near an eight-month high.
The Credit Suisse global strategy team’s annual surprise predictions include a surge in U.S. stocks and a bursting of the Chinese bubble.
Based on the early price action, the direction of the EUR/USD the rest of the session on Friday is likely to be determined by trader reaction to the 50% level at 1.1110.
The price action suggests that gold traders are betting once again on a steep break in the stock market. They believe stocks are overpriced and setting up for a huge decline.
On Thursday, the U.S. Senate overwhelmingly approved the new free-trade agreement between Canada, the United States and Mexico. The deal, which covers the biggest free-trade zone in the world, should boost the economies of all three countries.
The glass of economic data is half full if we estimate the reaction to the macroeconomic data. This applies to both last Friday’s U.S. employment report, and China’s GDP figures released this morning. The published data for the 4th quarter of 2019 showed that the economy slowed down to 30-year lows.
London stocks rose and the pound fell on Friday, after disappointing sales data drove up expectations for an interest-rate cut when the Bank of England’s Monetary Policy Committee meets at the end of the month. The FTSE 100 index (UK:UKX) rose 0.9% to 7,678.24, and was poised to gain 1.2% for the week. “Economists were expecting an increase of 0.5%, so the reading was a big miss on forecasts,” said David Madden, market analyst at CMC Markets, in a note to clients.
Retails sales in the UK were much worse than analysts expected, fueling rate cut expectations and putting Sterling under pressure.
EUR/USD was dragged lower by yesterday’s US retail sales report and is holding near lows, threatening a break of support.