Two trades to watch: GBP/USD, Gold

GBP/USD rises despite stalling economic growth. Gold looks ahead US data drop.

Gold 5

GBP/USD rises despite stalling economic growth

GBP/USD is rising despite disappointing Q3 GDP data. The final reading revealed that the UK economy grew 1.1% in the July – September period, down from the preliminary reading of 1.3%.

The was also notably down from the 5.5% rise in GDP in the second quarter.

The data shows that the UK economy grew more slowly even before Omicron hit, which will be a threat to growth in the final months of the year.

The UK economy was 1.5% below where it was pre-pandemic and is still expected to return to pre-pandemic levels in Q1 2022.

Looking ahead US GDP & consumer confidence data will be in focus, in addition to Omicron headlines.

Learn more about the pound

Where next for GBP/USD?

GBPUSD has been trending lower since June. The pair hit support at 1.3161 and is attempting to recovery from that yearly low.

The recovery has stalled at the 20 sma around 1.3265. A move above here is needed in order to expose the falling trendline support turned resistance at 1.33. Beyond here 1.3340  the December high comes into focus, above which buyers could gain traction.

Failure to retake the 20 sma could see the pair head back towards he 1.3170/60 area which could offer strong support.

gbpusd chart

Gold falls ahead US data drop

Gold is heading lower for a fourth straight day on Wednesday as it looks ahead to the release of US Q3 GDP data and the US Conference Board consumer confidence index.

The final Q3 GDP is expected to confirm 2.2% growth, down from 6.7% in the previous quarter. Meanwhile consumer confidence slumped to a 7 month low last month on rising prices and COVID cases. Morale could deteriorate further.

Learn more about trading Gold

Where next for Gold?

Gold ran into resistance at 1714 last week and has been falling since. A drop below the 50 & 100 sma and the RSI moving into bearish territory is keeping the seller’s hopeful of further losses and a move back towards 1753 the December low with 1772 a potential support on the way down.

Any meaningful recovery would need to re-take the 100sma at 1788, and the 50 sma at 1800 in order to bring 1814 back into target.

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com 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.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.