Wednesday, February 9, Markets Overview

GBPUSD 

In the US, all eyes will be on the Consumer Price Index for the month of January, released on the 10th of February. This report released by the US Department of labor statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. A reading below 0.5% will be considered as bearish for the USD; however, a reading above this estimated number will be considered as bullish for the USD. Another important report for traders and for its impact on the market is the Michigan Consumer Sentiment Index. This report released by the University of Michigan is a survey of personal consumer confidence in economic activity. Consumer energy can translate into greater spending and faster economic growth. A stronger labor market helps turn the Fed hawkish. Actual figures beating 67.5 tend to be USD bullish.

In England, Gross Domestic Product will be announced on Friday. The Gross Domestic Product released by the National Statistics is a measure of the total value of all goods and services produced by the UK. For the UK economic activity, it is considered as a broad measure. A reading below 1.1% will be considered as bearish for the GBP; however, a reading above this estimated number will be considered as bullish for the GBP.

From a technical perspective, to regain its bullish momentum and target 1.3600 the pair needs to rise above 1.3560. On the downside, a break below 1.3520 will target the next support level at 1.3500. if this pair breaks below this level price could stretch lower toward 1.3460.

XAUUSD

The Fed response to the Latest US employment report – which showed an additional 467k jobs in January – was a push on the yield on the 2- and 5-year US government bonds to the highest level ever since July 2019 and February 2020, respectively. That was the factor that held back traders from placing bullish bets and kept a cover on any further gains for gold.

From a technical perspective the recent bounce from the lowest level since December 16 at $1,780 stalled just ahead around the $1,825 region, a break above this level will accelerate the uptrend and target the next resistance at $1,832, which is a fresh trigger for bullish traders. Any break above the supply zone can make the Gold to test back to the January high, around the $1,853.

On the flip side anything below the pivotal point at $1,810 would make gold vulnerable to slide further below the $1,800 mark, followed by the next support level at $1,790.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.

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