Gold penetrated the rising trendline which had been in place since September, signaling a potential trend change. The strong momentum on the way down suggests that selling is likely to continue. Yesterday’s steep decline puts it just slightly above support at 1325. If that level breaks, the next significant support region is around 1260.
The Pound had been faring well compared to other currencies, and until yesterday had managed to remain above support at 1.60. The bears took control yesterday, pushing the GBPUSD below 1.60, and it is now resting on its trendline. The slide had been slow until yesterday, giving a good chance for a bounce off of the trendline.
The USDCHF surged through resistance at .9930, with a very large bodied candle on the 8-hour chart. If prices can break past the 1.000 level, we will have a confirmed change in trend. Prices have already put in a higher low (point A), and if they can make a higher high, that will confirm the change in direction. Gold’s recent weakness supports the case for the Franc’s drop against the dollar.
Written by bforex.com