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.

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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.

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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.



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