Today was a sad day for the British Pound which depreciated against every single G10 currency.
The toxic mixture of political drama in Westminster and rising uncertainty over Brexit have created a recipe for disaster and chaos for the British Pound. With appetite for the currency clearly diminishing by the day as fears mount over the UK crashing out of the EU without any deal in place, Sterling weakness is poised to remain a dominant theme. Taking a look at the technical picture, the GBPUSD is unquestionably bearish on the daily charts. The shooting star candlestick created on Tuesday signals further downside with the next key level of interest at 1.2620. A solid breakdown below 1.2620 is seen opening a clean path towards 1.2500 as discussed earlier in the week.
Euro finds comfort below 1.1200.
The Euro remains mellow and content below 1.1200 as political uncertainty compound to the Euro’s outlook ahead of the European Parliament elections. With Italy reviving tensions with the European Union over its budget plans and Brexit drama adding to the uncertainty, this week’s elections could rock the Euro violently.
Taking a look at the technical standpoint, the EURUSD remains bearish on the weekly charts as there have been consistently lower lows and lower highs. Sustained weakness below 1.1200 is likely to open a path towards 1.1100 and 1.1000, respectively.
Is Gold losing its shine?
This is slowly shaping up to be another depressing week for Gold prices as the precious metal struggles to break back above $1280. Ongoing US-China trade tensions have sent investors rushing towards the
Dollar which has offered nothing but pain and punishment to Gold. Should the Dollar continue appreciating on risk aversion, the precious metal is likely to test $1268.50 in the near term. While bulls are losing the current battle, they still have the potential to win this war.
Much attention will be directed towards the FOMC minutes this evening which should provide fresh insight into the Federal Reserve’s monetary policy path. Gold could still rebound higher if the minutes sound dovish and reinforce market expectations over a potential US rate cut this year. Looking at the technical picture, bears remain in control below $1280 with the next key level of interest at $1268.50.