Two trades to watch: Gold, EUR/GBP

Gold steady around two-week highs ahead of CPI. EUR/GBP edges lower ahead of EC quarterly economic forecasts & ECB/BoE talk.

Gold 2

Gold steady around two-week highs ahead of CPI

Gold received a boost yesterday as US treasury yields eased, pulling the dollar lower. Russia – Ukraine tensions continued to act as a tailwind. Gold rose to $1836 a two-week high, before slipping slightly to 1833.

Gold is consolidating around these levels ahead of US CPI inflation data. Expectations are for CPI to reach 7.3% YoY in January, up from 7% in December.

High inflation would come following January’s impressive non-farm payroll report and December’s upward revision. A strong labour market and high inflation would prompt expectations of a more aggressive Fed which is bad news for non-yielding gold

Where next for Gold prices?

Gold is extending its rebound from 1780 the 2022 low. The price has retaken the 50 & 200 sma and has run into resistance at 1836.

The 50 sma has crossed above the 200 sma in a golden cross bullish signal, and the RSI is also supportive of further upside.

Should buyers push above 1836 yesterday’s high, 1840 round number will be in focus ahead of 1850 psychological level.

A big beat on CPI could see gold prices come under pressure heading back to 1825 January 21 low. A move below the 50 & 200 sma at 1806 could see sellers gain traction.

gold chart

EUR/GBP edges lower ahead of EC quarterly economic forecasts & ECB/BoE talk


EUR/GBP is edging lower after booking mild gains in the previous session. Comments from BoE Chief economist Pill weighed on the pound. He cautioned that it was better to adopt a more measured approach to rate rises.

Earlier in the week the euro traded under pressure as ECB policy makers back-tracked on the hawkish ECB meeting.

Today we hear from ECB policy makers and BoE Governor Andrew Bailey for further insight into where monetary policy is going and at what speed.

The European Commission will also release its quarterly economic forecasts, should these show inflation is ex

Where next EUR/GBP?


EUR/GBP trades within a multi-month falling channel. The pair rebounded off the lower band of the channel, re-taking the 50 sma before running into resistance at 0.8478.

The price has eased off this high, falling below the 100 sma but remains above the 50 sma. Whilst the RSI is supportive of further upside, buyers will look for a breakout above 0.8455 the 100 sma in order to attack resistance at 0.8480. A  move above here could see buyers gain momentum.

On the flip side. Sellers could wait for a move below 0.8410 the 50 sma and yesterday’s low to target a move back towards 0.8335 January 18 high and 0.8310 the lower band of the falling channel.

 eurgbp chart


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 or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account