Key Economic Data - Coming Up Today(All Times GMT+3)
The EURUSD opened the new week lower with a gap down at the open. The pair re-opened at 1.2500 following a close of 1.2519 and then sunk to a new 2 year low of 1.2439. The price has since recovered to reach a high of 1.2505 and is now trading at 1.2490. The pair is now lower for the fourth consecutive day during which time the price has retreated from 1.2771 to 1.2439. The Euro had strengthened for four day in a row prior to this recent return to a downtrend. We are now a full 15 cents and 1500 pip below the 1.3990 reached in May this year. The Daily RSI is 35.5 and the Weekly RSI is at 25.4 indicating that the pair is potentially in oversold territory. Overnight Building Approvals plummeted in Australia while China Manufacturing Data was in line with forecasts. This morning Spanish Manufacturing PMI was slightly better than forecast while Italian Manufacturing was weaker than expected and the Euro Wide Manufacturing PMI came in a 50.6 versus expectations of 50.7. Over in the US markets await US Manufacturing PMI later in the day.
The technical picture for the EURUSD is weak, as seen on the H1, the blue rising trendline for the pair has been broken in devastating fashion. This ends the hopes for the EURUSD targeting a move beyond 1.2890 and within range of the key 1.30 level. At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish. - This has been our consistent outlook for two month now, although the picture had become more mixed as the pair had re-entered the lower end of the downtrend channel as seen in the H4 Chart. Overall the bias is sill negative for the EURUSD although there is slightly more hope for the bulls now due to the price action of the last three weeks. The pair had recently begun to re-enter into the lower end of the downtrend channel. The price has now collapsed and signaled this latest attempt to rebound in the EURUSD as a failure.
EURUSD Support areas include 1.2500, 1.2475, 1.2425, 1.2300. Resistance levels above are at 1.2600, 1.2700, 1.2845, 1.2800, 1.2900,1.30 figure level, followed by 1.3165.
EURUSD 1 Hour Chart
EURUSD 4 Hour Chart
EURUSD Pivot Point Table
Gold continues to fall this new week after opening with a gap of $3 lower. The price then proceeded to decline by almost 1%, making a low of $1161.50. The Gold price has since strengthened to reach a high point of $1172.84 and is now trading at $1168.86. Following months of steep declines Gold has settled below the $1180 key support area and may be set for further declines. Below $1180 Gold is in the sell/put zone. Buyers of the precious metal are fewer now that US Bonds are set to offer higher yields and bank accounts will begin to offer higher interest rates. The rising yield curve implied across the financial markets makes Gold less of a safe bet. Erosion of demand may pressure Gold prices considering there has been enormous speculation in the yellow metal for the preceding 15 years. One factor that could support Gold would be if Central Banks starting with the Fed find themselves unable to normalize interest rate policy.
Coming up today, US markets await US Manufacturing PMI later in the day. This week will be quieter in terms of economic data following the FOMC and US Advance GDP last week. Also markets are still digesting the results of the ECB Bank Stress Tests.
Support levels for Gold can be seen at $1170, $1155, $1145, $1130. Resistance to the upside materializes at $1185, $1195, $1205, $1215, $1225, $1235, $1240.
Gold 1 Hour Chart
Gold 4 Hour Chart
Gold Pivot Point Table