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11 August 2020

EUR/GBP starts to break down from its range – Commerzbank

EUR/GBP is flat on Tuesday morning as trades at 0.8980. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the pair lost steam ahead of the 55-day ma at 0.9051 and expects a drop towards the 0.8931 July low.

Key quotes

“EUR/GBP has failed near-term at the 55-day ma at 0.9051 and is starting to break down from its range. Above the market lies the 0.9134 resistance line and this guards the recent high at 0.9178. We would allow for a slide to 0.8931 the July low.”

“A move above 0.9184 (Fibo) would trigger a rise to 0.9308 the 2017 high and 0.9323. This is the location of the 78.6% Fibonacci retracement. This is formidable resistance and is expected to hold the initial test.”

Breaking: Gold tumbles below $2,000 amid profit-taking, dollar strength

Gold is extending its downward correction and is trading around $1,990, a shape fall of over $33 on the day, and a total of $85 from the all-time high of $2,075. The 2011 peak of $1,921 is a distant support line, but XAU/USD may find support at around $1,950.

After the initial fall to $1,990.09, prices have been stabilizing, but gold has been unable to recapture the round $2,000 level and is trading at the lowest level in a week.

The US dollar is gaining ground in recent days, putting pressure on the yellow metal. There is an inverse correlation between gold and the greenback.

Silver is also sliding, changing hands below the $28 level. XAG/USD has been holding up better than XAU/USD.

The move is the result of ongoing profit-taking after the remarkable rally. Here is the precious metal’s fall on the 15-minute chart

USD/CHF Price Analysis: Bounces off 200-hour EMA to regain 0.9150

USD/CHF trims initial losses while picking up bids near 0.9152 during the pre-European session on Tuesday. The pair broke a four-day-old ascending trend channel formation but 200-hour EMA and 50% Fibonacci retracement of its August 03-05 downside triggered its latest pullback.

Even so, bearish MACD challenges the optimism while also highlighting the channel’s support line, at 0.9160. If at all the pair manages to cross 0.9160, 61.8% Fibonacci retracement level around 0.9168 could gain market attention.

However, bulls’ ability to cross 0.9168 will swiftly cross 0.9200 to attack the channel’s upper line, currently around 0.9210.

Meanwhile, a downside break of 0.9147 support confluence will direct the sellers towards the weekly low near 0.9122 and then to the 0.9100 threshold.

In a case where the bears command past-0.9100, Wednesday’s multi-month low of 0.9050 will be the key ahead of 0.9000 psychological magnet.

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