x
Breaking News
0

Sterling Struggles To Keep Afloat; Gold Tumbles

By ForexTime Market OverviewDec 07, 2017 08:25AM ET
www.investing.com/analysis/sterling-struggles-to-keep-afloat-gold-tumbles-200271303
Sterling Struggles To Keep Afloat; Gold Tumbles
By ForexTime   |  Dec 07, 2017 08:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

This is certainly shaping up to be a painful trading week for the British pound, as fears mount over the lack of progress in Brexit talks.

The lingering disappointment from Prime Minister Theresa May’s failure to secure a Brexit deal on Monday, is still reflected in sterling’s depressed price action today. With the E.U’s Chief Negotiator, Michel Barnier, giving the British government only 48 hours to agree on a potential deal, May is under renewed pressure to solve the deadlock over the Irish border.

Although some remain cautiously optimistic of May securing a deal with the DUP, sterling is still at risk of depreciating further, if Britain is unable to achieve a potential agreement by Friday. An unfavourable situation where Brexit talks are delayed until 2018, is likely to translate to further pain for the already vulnerable British Pound.

From a technical standpoint, the GBP/USD is struggling to keep afloat on the daily charts, with prices trading towards 1.3360 as of writing. Although prices are trading above the daily 50 Simple Moving Average, the bullish daily channel is at risk of becoming invalidated below 1.3340. Sustained weakness below the 1.3400 minor resistance level is likely to encourage a further decline towards 1.3350 and 1.3300, respectively.

Global stocks edge higher, but for how long?

Global stocks were under pressure during Wednesday’s trading session, as geopolitical risk and falling oil prices eroded investor appetite for risker assets.

Interestingly, Asian equities closed mixed today while European stocks ventured higher, as investors redirected their focus on the U.S. tax reforms and Brexit developments. With European markets back in the green territory, the positive momentum could trickle down into Wall Street later this afternoon. While stock markets could edge higher as investor sentiment improves, the upside may face some headwinds if participants adopt a cautious approach ahead of Friday’s NFP report issuance.

Dollar flexes on U.S tax reform optimism

The greenback appreciated against a basket of major currencies on Thursday, thanks to a renewed sense of optimism on U.S. tax reforms.

With the U.S Senate Republicans agreeing to a discussion with the House of Representatives on a major tax reform bill, some investor anxiety over potential obstacles and complications has dissipated. The growing optimism over lawmakers potentially agreeing on a final bill before the 22 December deadline, could continue supporting the dollar.

Taking a look at the technical picture, the breakout above 93.50 on the Dollar Index could encourage an appreciation towards 93.80 and 94.00, respectively.

Commodity spotlight – Gold

Gold found itself under intense selling pressure during Thursday’s trading session, amid a strengthening U.S. dollar.

The yellow metal has tumbled to its lowest level in four months at $1255 and may be in store for more punishment, thanks to rising optimism over U.S tax reforms. Bears are currently in the building with further downside on the cards if Friday’s NFP report exceeds market estimations. From a technical standpoint, gold turned bearish on the daily charts after prices secured a daily close below $1267. Previous support at $1267 could transform into a dynamic resistance, that encourages a decline towards $1250.


Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.

Sterling Struggles To Keep Afloat; Gold Tumbles
 

Related Articles

Sterling Struggles To Keep Afloat; Gold Tumbles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email