Over the last few days we have seen investors’ attention to risk assets grow. There are several reasons for this sentiment – improving general macroeconomic statistics and quarantine mitigation in most regions.
An excellent US employment report, as well as a maximum growth of activity in China’s service sector, give a reason for another rally.
Please note the DAX index. From the fundamental point of view, business activity in Germany, and the entire Eurozone exceeded expectations.
From the technical point of view, the index is above the daily SMA200. There was also a break-down of 12390, which was the main resistance level for several consecutive weeks.
Considering all these factors, we can assume that the bullish trend will continue, but we should take into account possible corrections to the support levels.
While the markets are hovering in a range only GBP has a chance to somehow show a trend. If the negotiations on the Brexit give some result next week, we are likely to see a positive trend. The pound has an opportunity to grow up to the level of SMA200 – 1.2670. Given the weakness of the U.S. dollar due to the departure of investors in risky assets, the pound has all chances for growth.
The weekend in the USA has reduced the opportunities for gold to try to go above past highs. It is traded almost in flats, however, it looks like the current growth momentum is starting to fade.
The RSI indicator on the 4-hour chart gives bearish signals and also confirms that the growth momentum is fading.
So far, the gold is still in the upside, but you can already see that the price needs some pullback to continue rising to $1800 per ounce.
What’s waiting for us today?
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