Forex Trading Report - August 27, 2013
The pair gained against the U.S dollar significantly but couldn't hold all of its gains as it lost a few points on Friday; however, it managed to remain in the bullish channel. This week, the start was pretty sluggish for the pair as there was no strong movement and the pair moved in a very short range of 40 points on Monday.
Currently the pair is trading at 1.3372 just before the start of the European session, where a move above its resistance level of 1.3384 could take to its mild resistance level at 1.3394 and then 1.3408. However, a move below 1.3358 would open the doors for the pair to test 1.3347 and 1.3333.
German Ifo Business Climate data is due in a couple of hours where good volatility could be seen in the market, plus we have Consumer confidence data for the U.S that is set to be released later in the U.S session.
The British Pound lost all of its gains of last week and closed in the bearish channel on Friday, after which it remained range-bound on Monday. Currently the pair is hovering at 1.5551 level that is just above its major support. Provided that it makes a sustainable move below 1.5545 then it would go on to test 1.5530 and 1.5517 and then 1.5505.
It has a cluster of resistance levels upwards that could hinder it move above; however, it must move above 1.5586 pivot point level to test 1.5601 and 1.5629 where sellers could start entering the market yet again. Selling would be good as long as the pair moves below 1.5535 level.
On Monday, the core durable goods orders data for the U.S disappointed the USD investors, which also portrayed that the economy would need some more time to get back on track and so the FED may postpone its tapering decision. In speculation to that, the U.S stock market gained nearly 0.4% but then later on a political statement about the use of chemical weapons in Syria resulted in losing those gains. The U.S Secretary of State Mr. Kerry said that Mr. Obama would hold the Syrian government responsible for the use and damage done by chemical weapons in Syria. After this news, the bulls entered the gold market and took the metal above the psychological level of 1400 and gave a closing above this.
The inflated crises in the Middle East and uncertainty about the FED's decision make it easier for the investors to shift their investment from the stock market to something that is a safe haven, and apparently that seems to be gold.
Gold has already tested its next target of 1407, now if it moves above this level it could hit 1421 and 1430 in the short term; whereas, a move below 1390 could take it to 1382 and 1375 support area.