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GBP And Gold Remain Relatively Unchanged

Published 01/16/2019, 03:49 AM
Updated 05/14/2017, 06:45 AM

Yesterday we had a real roller-coaster on the GBP. This is not a surprise given the Brexit vote and an expected increase in volatility. The outcome for the GBP was rather random. At the end of the day, the price made it's most popular move in one direction, total retracement and a come back to the previous levels. We have seen this on many occasions with interest rates decisions, NFP data, etc.

GBP/USD broke two important supports. First one was more local one – 1.2815 (orange) and the second one was the long-term one – 1.272 (blue). The breakout of the first one was temporary and the breakout of the second one was a fake one and happened only in the short-term. At the end of the day, the price reversed and as long as the GBP/USD stays above the orange line, we have a buy signal.

EUR/GBP had a great sell signal before the vote as the price broke the lower line of the rectangle pattern. Tuesday's volatility brought us a test of the lower line of the rectangle, which ended with a bearish bounce. Wednesday starts with the new weekly lows, so the sell signal is intact.

How did gold perform? The price did not move much. In general, we are in the ascending triangle pattern, which is promoting a further rise. Most recently, the price is locked inside of the pennant formation(green lines). In my opinion, we should soon see the test and the breakout of the orange horizontal resistance.

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