By Orbex
The headline moves yesterday were seen in equity markets which plummeted (S&P down 3%) under pressure from an uptick in US yields and USD. Consequently, we saw a flight to safety which drove the bid in gold but weighed on risk currencies.
A light data calendar should see a fairly muted European morning though US CPI data due later today has the potential to further weigh on risk appetite if we see a strong number. Similarly, any US data weakness today should see some lightening up of yesterday’s bearish tone.
After briefly piercing above the 1.1545 area resistance, EURUSD has since slipped back below the level. For now, price action continues to move within a short-term bullish channel which until broken, keeps focussing on a further recovery higher. If we do see a downside break, the 1.1515 level might provide some intraday support with prior highs and lows at the level. To the topside, the 1.585 – 1.1593 is the key resistance level (last week’s high) which will need to be broken to see a further topside run.
The run above the late September high of 1.3216 eventually failed, and the price has since moved back below the level. While below here, the focus is on a run down to deeper support at the 1.3113 region where we have a raft of prior highs and low. Alternatively, if we see a move back above 1.3216, the September high of 1.3297 will come into focus.
Gold prices have now surged above the local 1196.41 region that saw key support last week. For now, price remains in the middle range of the larger contracting triangle pattern which has framed price action over the previous few weeks. If the topside triangle trend line is broken, the focus will turn to a test of structural resistance around the 1206.61 – 1208.42 region. To the downside, initial support is sitting at the 1191.48 region, while below there the rising triangle trend line provides support.
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