The US dollar has surged to levels unseen since April after the Fed's decision back on Wednesday. Gold has reversed up from the local dips. Still, this week was the worst for gold in more than a year.
Fears over no-deal Brexit pushed GBP down
All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations. However, there is still a chance that the deal may be reached as Boris Johnson will have a meeting in Brussels today with European Commission President Ursula von der Leyen. After this news, GBP/USD surged. That’s why it’s really important to follow Brexit news today for every trader. Some positive developments towards the Brexit agreement will drive the pound up, whereas negative ones will push it down. Let’s look at the chart.
GBP/USD has managed to regain some yesterday’s losses. However, it failed to cross the key resistance of 1.3400 on its way up. If it manages to break it, it will rise to yesterday’s high of 1.3435. On the flip side, the move below the support of 1.3300 will open doors towards yesterday’s low of 1.3265.
Moving on to the US news, Trump’s administration imposed sanctions on Chinese officials over the Hong Kong issue. Since the virus cases are steadily rising and Friday’s NFP is downbeat, investors are increasingly looking for the US stimulus package. Hopes for a relief package and the overall cautious sentiment on the market drove gold higher. It has jumped slightly above the 50% Fibonacci retracement level but still has struggled to break the 200-period moving average of $1 870. The move above it will drive gold to the 61.8% FIbo level of $1 890. Support levels are $1 840 and $1 825.
EUR/USD is edging higher. If it jumps above the 50-hour moving average of 1.2135, the way up to yesterday’s high of 1.2155 will be clear. In the opposite scenario, If it drops below the support of 1.2100, it may drop to yesterday’s low of 1.2095.
Japan’s Prime Minister unveiled the stimulus package of 708 billion. Besides, Japan published the better-than-expected GDP today. USD/JPY is trading sideways at 104.00. The US dollar is really weak these days, that’s why we can assume that investors will favor the JPY amid the current cautious sentiment. The move below yesterday’s low of 103.90 will drive the pair to the next support of 103.70. Resistance levels are 104.20 and 104.40.
Great Britain will release retail sales for May on June 18, at 09:00 MT time. One cannot underestimate the importance of this indicator.
The Fed made a hawkish surprise! The bank would start a discussion about scaling back bond purchases. Besides, it is likely to make two interest-rate increases by the end of 2023 (sooner than expected)!
Wednesday will please traders as many economic indicators will be out! The USA, UK, and Euro Area will release PMI reports on June 23 from 10:15 to 16:45 MT.
The Bank of England will release its statement and announce its monetary policy decision at 14:00 MT.
Last week the USD soared versus other major currencies, while gold headed for the biggest weekly loss in 15 months. Let’s see what new moves await us this week!