Gold (XAU/USD) mirrors USD Index

(Brad Alexander – FX Large Limited)

No, you are not looking at a reflection on a pond.

This is how Gold is inversely correlated to the USD with a four-hour chart on the USD Index vs a four-hour chart on Gold.

The rise in the price action on Gold is a direct result of a weaker USD.

Even last week’s very good Non-Farm Payrolls number could not stop the weak run of the USD.

In fact, it was a perfect Counter-Trend Price Action trade with most USD pairs.

For example, price action on GBPUSD fell almost 160 pips into this key level of support and a long trade was there for the taking with over 200 pips available on the upside.

The only real US news available this week is a PMI but we await an Australian Interest Rate decision and GDP, a Canadian Interest Rate decision and a PMI, and European Retail Sales, Employment, and GDP.

Natural Gas has become quite famous for its gaps so let’s see if price action can fill this one.

We will wait for a selling opportunity as we don’t want to trade against the trend.

If price action fills the gap and reaches a key level, we will see it tomorrow in our Technicals video.

If you read our monthly blog you would have seen that Asian equities are bullish thanks to better news about Chinese COVID lockdowns.

Here, however, is an opportunity to buy the dip on the Nikkei on a bearish pullback.

Could EUR/GBP continue rising towards the 0.8650 level?

(AAATrade Team)

EUR/GBP

Looking at EUR/GBP’s chart, we can see that the FX pair is traded 20 pips below its resistance level at around £0.8580, a level which it failed to pass in the past days. Today, if it fails to break through the rate of £0.86, then we could expect it to drop further towards its next support level at around £0.8550 otherwise it should continue rising towards its next resistance level at around £0.8640-0.8650.