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Gold Wobbles Above $1400 as Dollar Stubbornly Clings to Gains

Lukman Otunuga
Gold limped into the trading week bearing battle scars from last Friday’s NFP induced selloff. Prices are struggling to keep above the $1400 level as of writing and could sink further thanks to the Dollar.

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Investors seem to be re-evaluating whether the Federal Reserve will cut interest rates this month following the strong US jobs data and this continues to be reflected in the Dollar’s positive valuation. A resurgent Greenback complemented up with fading hopes of a Fed cut is certainly bad news for zero-yielding Gold in the near term.

However, Gold bulls are unlikely to lose sleep over this development given how global growth concerns, trade uncertainty and other geopolitical risks linger in the vicinity. Although the Fed may think twice before pulling rate cut trigger this month, the central bank is highly to act before year-end.

Away from the fundamentals, the technical illustrate a bullish picture on the daily charts. The trend points south despite Friday’s heavy selloff with buyers in control above $1380. A technical rebound from the $1380-$1400 region should inject bulls with enough inspiration to challenge $1430 and beyond.

Alternatively, a breakdown below $1380 should spark a depreciation towards $1360.

GBPUSD aggressively knocks on 1.2500’s door

Buying sentiment towards the Pound continues to diminish by the day as the poisonous combination of Brexit uncertainty, political risk, recession fears cripple appetite for the currency.

The GBPUSD is heavily bearish on the daily charts and has space for further downside amid an appreciating Dollar. A solid breakdown below 1.2500 should open the gates towards 1.2420 in the near term.

This setup will most likely be influenced by the pending GDP m/m report on Wednesday morning.

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This article was originally posted on FX Empire

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