Weekly data: GBPUSD & gold price action

GBPUSD, daily

The negative Claimant change on the 13th as well as the decline in unemployment figures in the United Kingdom had a positive effect on the quid against the dollar while the pausing of the Fed on the 14th had also contributed to the gains seen on the daily chart of the cable pair. In regards to last weeks’ economic data, the single hike in interest rates by the Bank of England and the stable inflation rates were not enough to support the British pound and we witnessed short term losses that carry over until the day of this report.

For this week the speech of the chairman of the Fed J.Powell on the 28th and 29th is what draws the attention of market participants in an effort to get hints on the central bankers intentions in regards to the monetary policy and the future of the greenback. Investors and traders will also be monitoring the data on Friday the 30th of June about core PCE as well as personal income and personal spending which is what the Fed is greatly taking into consideration to form their action plan about interest rates decisions.

On the technical side, the price on the chart is currently in a correction status after reaching a yearly high of around $1.28500. The upper band of the Bollinger bands proved to be a strong resistance while the Stochastic oscillator returned back to the “neutral” level after correcting from the “overbought” area. Even though these “negative” indications can be seen on the daily chart, the price is still trading above all of the 20, 50 & 100 day moving averages. The faster moving averages are also trading above the slower one which is a “confirmation” that the overall bullish momentum is still valid regardless of the recent correction to the downside.

XAUUSD, daily

Gold prices rose on Monday as geopolitical concerns over Russia outweighed pressure from a hawkish interest rate outlook. The yellow metal had dropped nearly 2% the previous week due to hawkish comments from Federal Reserve officials indicating more rate hikes to tame sticky inflation. However, markets saw a 72% chance of a rate hike in July according to Fedwatch tool, with cuts expected to be seen early in 2024 at the Fed’s meeting on the 31st of January. The dollar index edged 0.2% lower, making gold cheaper for holders of other currencies, while competing safe-haven asset Treasury yields hit their lowest since June 7.

From a technical standpoint, the price has been in an overall bearish movement since early May with the steep decline “losing” some momentum in the beginning of June where the price entered a slightly declining channel rather than a full bearish pullback. The level of 61.8% of the weekly Fibonacci retracement level has been a quite strong support area on the chart and the price has been correcting to the upside in the last 3 sessions. The Stochastic oscillator has pulled back from its oversold levels indicating that the minor move up has still potential to continue while the 50 day moving average is still trading above the 100 day moving average possibly signaling that there is some room for the price to continue moving North at least in the short term.

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