Two trades to watch: EUR/GBP, Gold

EUR/GBP falls ahead of Eurozone investor sentiment data. Gold falls as US bond yields rise.

Charts (2)

EUR/GBP falls ahead of Eurozone investor sentiment data

EUR/GBP trades around a 23-month low at the start of the week. A stronger USD is pressuring the Euro amid rising inflation concerns.

The Pound is finding some support from easing Omicron fears and expectations that the BoE could hike interest rates again sooner rather than later.

Attention is on Eurozone Sentix investor confidence data which is expected to show morale declining to 12 in January, from 13.5 in December.

Brexit woes could limit gains in the pound as talks are due to start again this week.

Learn more about the Euro

Where next for EUR/GBP?

EUR/GBP is testing a 23 month low at 0.8335. The pair trades below a multi-week falling trendline and below the 50 & 100 sma on the 4 hour chart, which combined with the bearish RSI are keeping sellers optimistic of further losses.

A break below 0.8335 could open the door to 0.83 round number and 0.8280 the 2020 low.

On the upside, 0.8353 the falling trendline could offer resistance ahead of 0.8373 the 50 sma and 0.8395 the January 4 high.



Gold falls as US bond yields rise

Gold is falling as US inflation and the Fed’s next move are set to dominate trading this week.

US bond yield are rising, boosting the US dollar amid concerns that the Fed are behind the curve after Friday’s surprise jump in wage growth.

US CPI data and Fed speakers, including chair Jerome Powell this week, could boost the case for higher interest rates, which is bad news for non-yielding gold.

Separately, COVID concerns and Russia -Ukraine matters are supportive of gold ahead of the Biden- Putin call later in the week.

Learn more about treading Gold

Where next for Gold prices?

The rebound from the multi-month rising trend line support failed to retake the 50 or 200 sma, which combined with the bearish cross over on the MACD are keeping sellers hopeful of further downside.

Sellers need a break below 1782 last week’s low and towards 1770, a key support in early December. A move below 1760 could see sellers gain traction.

On the flipside, a move above 1800 the 200 sma and round number is needed for the bulls to target 1815 the mid December high.

Gold chart  

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade.



Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.