Last week was packed with political events and economic releases from the big economies.
Gold benefited from an uptick in risk off sentiment as it tested $1296 resistance on Friday as news outlets reported that Special Counsel Thomas Mueller investigation Trump’s collusion with Russia has requested for more documents from Trump’s electoral team. Also helping Gold was difference of opinion from Senate with respect to Trump’s tax reform bill.
EURUSD benefitted from a weak Dollar and short squeeze as it rallied 200 pips to close the week at 1.1775. The earlier break of 1.1650 support had painted a technical picture focussed for a move towards 1.1450, building up short positions. But lack of follow through selling have now pressured the shorts stopping out a lot of their trades, accelerating the move even further.
GBPUSD benefited from the confidence it gained after 1.3060 was defended the week earlier. UK data for the week was mixed with CPI holding on at 3.0%, number of people in employment fell for the first time in 8 months while retail sales improved marginally. GBPUSD had a strong week to end the week at 1.3212.
USDJPY tracked dollar lower, losing 150 pips to end the week at 112.08.
USDCAD had a relatively quiet week as weak inflation data last week offset benefits from a weak dollar and a higher oil price. Canadian inflation last week came in at 1.40% lower than 1.60 recorded in the earlier month.
Gold bulls would want to get rid of the crucial resistance at $1296 as soon as possible for another attempt at 1310 levels. $1296 has proved a tough nut in many previous occasions, but an uptick in geopolitical tensions might help the bulls. Saudi Arabia have called an urgent Arab meeting in Cairo today to discuss Iran meddling in Arab affairs. Matters in the gulf looks set to be on the spotlight again and any flare up of tensions would have the Gold bulls excited.
EURUSD has painted a very strong bullish picture last week. Thursday would be the day of the week for EURUSD traders as a host of German and Euro area data is expected along with the minutes of previous ECB meeting. Immediate support for EURUSD comes in at 1.1730.
GBPUSD continues to be in the 1.3340 – 1.3040 range and shows no signs of breaking out of it anytime soon. Next week is light on economic data from UK except for Thursday’s GDP release. Immediate support lies at 1.3170.
Bears have an upper hand in USDJPY but they would have their work cut out as strong support exists at 111.75, where 200 and 100 dma converges.
USDCAD has support at 1.2720 and resistance at 1.2920. Thursday sees Canadian retails sales data getting released that could help in understanding the state of Canadian economy. Preferring USDCAD to trade sideways to lower as long as 1.2920 is held on the upside.