somrat4030
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GBP/USD's fall from 1.3833 accelerated to as low as 1.3423 last week. The development argues that larger decline from 1.4248 is still in progress. Initial bias stays on the downside this week first 1.3410 low first. Break will confirm this bearish case and target 1.3164 fibonacci level next. On the upside, above 1.3604 minor resistance will mix up the near term outlook and turn intraday bias neutral first.
The structure of the fall from 1.4248 suggests that it's a correction to the up trend from 1.1409 (2020 low) only. While deeper fall cannot be ruled out yet, downside should be contained by 38.2% retracement of 1.1409 to 1.4248 at 1.3164, at least on first attempt, to bring rebound. On the upside, firm break of 1.4376 key resistance (2018 high) will add to the case of long term bullish reversal. However, sustained trading below 1.3164 will revive some medium term bearishness and target 61.8% retracement at 1.2493.
On the other hand, Crude started the week positively, trading closer to the yearly high. Since then the commodity dropped by around 4.3% (at 14:00 GMT) but dropped as low as 5.5% from the daily Monday close. The recent volatility around OPEC + and continuing calls from US President Joe Biden for the cartel to raise output levels faster than they have planned, saw oil move 5% on Thursday before closing just beneath its opening level to end the day relatively flat.
Moreover, The Thursday and Friday candles interestingly enough showed a significant rejection of prices lower than $80 (observed by the extended lower wicks) and Friday saw a concerted move well above the previous low at 81.95. This move adds to the bullish narrative suggested by the bull flag, which has encapsulated the larger pullback thus far.
Another news is, With the Federal Reserve's tapering and new employment data out of the way, the gold market is finally moving.
Gold jumped $25 on Friday as markets started to anticipate a more patient Federal Reserve going forward. December Comex gold futures were last at $1,818.60, up 1.40% on the day.
Despite kicking off tapering month, Federal Reserve Chair Jerome Powell acknowledged uncertainty around inflation while stressing it is too soon to start raining rates.
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