Two trades to watch: EUR/GBP, Gold

EUR/GBP steady after mixed UK labour markeet data. Gold looks to US CPI for direction.

Charts (6)

EUR/GBP steady after mixed labour market data 

UK unemployment fell to 4.6% in the three months to July, down from 4.7% as British employers added a record 241,000 staff to their payrolls amid an August hiring spree.  

However, the claimant count fell by a less than expected -58.6k, vs 71.7k forecast. 

The data has failed to provide much impetus to the Pound.  

Learn more about the Pound

Where next for EUR/GBP? 

EURGBP has traded quietly over the past few sessions in a familiar range. The pair has traded in a holding pattern capped on the upside by 0.86 and on the lower side by 0.8530.  

Traders could look for a breakout of the holding pattern. The bearish cross over on the MACD suggests that the break could be to the downside. A close below 0.8530 could spark a deeper selloff to support zone 0.8510/0.8500 the July low and September low. Beyond here bears to look to target 0.8455 the August low. 

Any recovery in the price would need to first clear the 50 sma at 0.8545 and the 100 sma at 0.8577. Only once these are cleared is a break above 0.86 and out of the holding pattern possible, 

 

Gold awaits US CPI data 

Gold is holding steady and has traded within a familiar range over the past week. Whilst Delta covid concerns have acted as a tailwind these have been offset by hawkish Fed official comments. 

All eyes are on the US CPI data later today which is expected to reveal that inflation ticked lower to 5.3% in August, but remained at decade highs. Core CPIA is expected to remain high at 4.2% down from 4.3%. A stronger than forecast reading is like to boost bets of the Fed moving sooner to tighten policy. 

Learn more about trading gold

Where next for Gold prices? 

The pullback from resistance at 1832 and the repeated failure to retake 1800 is supportive of the bears. However, over the past week gold has been trading in a holding pattern, showing indecision among traders, capped on the lower side by 1782 and the upper band by 1803. The RSI is also neutral. 

Traders could look for a breakout trade here. The buyers might wait for a move above 1803 to test 1823 the August high ahead of 1832 the September high. 

Sellers could look for a break below 1783, which could open the door to 1775 the late August low and a deeper move to 1750. Beyond 1750 losses could extend to 1720. 

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.

Get exceptional pricing & execution from a global market leader. Start trading with FOREX.com today.

OPEN AN ACCOUNT

More from Trade Ideas

Disclaimer: StoneX Financial Ltd (trading as "Forex.com") 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, Forex.com 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 Forex.com 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 Forex.com is not specifically prevented from dealing before providing this material, Forex.com 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.