11 Sep, 2023
5 minutes
GBPUSD XAUUSD Market insight
GBP/USD
The Pound has started the new week on a positive state despite a lack of bullish conviction. The US dollar pulled back from multi-week high that is expected to support GBP/USD. The Fed's hawkish stance and the end of the Bank of England's rate increases cycle will limit the Pound upside. The governor of BOE said that central bank is close to ending interest rate increases, but there would still be room for further rises in borrowing costs as inflation remains high.
We can see GBP/USD is running below the 48 hours moving average on H4 chart. The fundamental background of UK shows that the downward resistance of GBP/USD is the least. But investors need to wait for a sustained breakthrough of area around 1.2425 before establishing short positions. Hence the acceptable tactic is to set sell limit around 1.2570, stop loss must be compulsory.
XAU/USD
As the US dollar retraced before key inflation data published the week, gold prices rose, briefly exceeding 1930. In addition, the concerns about recession in Germany and economic slowdown in Europe will certainly bring some supports for gold. Markets don't expect the Fed to raise rates in September, and inflation data is unlikely to change that view. CPI may cause investors to adjust their target on whether the Federal Reserve will raise interest rates further.
The gold fell back after encountering resistance near 1930 on H4 chart. The MACD histogram bar has risk of forming a dead cross, and price once again runs below the 48 hours moving average. A rebound in US stock market, especially technology stocks, further weakened demands for no interest-bearing gold. As a result, the sell limit strategy could be employed, in range of 1930 to 1940, stop loss will depend on strength of rebo