The British Pound wasted no time in exploiting a weaker Dollar on Wednesday, as prices jumped towards the 1.2600 level. Expect the GBPUSD to push higher in the short term if the Dollar continues to weaken amid the positive market mood and economic recovery hopes.
Looking at the charts, the GBPUSD is trending higher on the hourly, four hourly and daily timeframes.
There have been consistently higher highs and higher lows on the hourly chart. An intraday breakout above the 1.2600 level may signal a move higher towards 1.2650 which is 50 pips away.
A similar theme can be identified on the H4 chart with the path of least resistance pointing north. Bulls remain on control as long as prices can remain above the 1.2550 higher low.
Should the 1.2650 resistance give way, this could open the doors towards 1.2800. Alternatively, sustained weakness under the stubborn 1.2650 level may result in a decline back towards 1.2500.
Commodity spotlight – Gold
Gold collapsed like a house of cards on Wednesday, shedding 2% as investors overlooked civil unrest in the United States and heavily focused on hopes around central bank intervention and economic recovery.
The precious metal is positioned to weaken further in the near term thanks to the improving market mood with $1680 acting as the first level of interest. A breakdown below this point may carve a path back towards levels not seen since mid- April around $1665. For bulls to snatch back control, Gold needs to break back above $1710.