End of Week Report 14 Dec

Gold Weekly Recap Last week, Gold made significant gains, taking out the 1238 Fibonacci and closing the week up at 1248. The high of this move ignoring Sunday's short session, was 1250 achieved on both Friday and Monday. This week has been muted in terms of volatility, but overall the market has been moving lower. Early trading today sees Gold trading circa the 1238 level once again.

Gold the Week Ahead It would represent a disappointment for the Bulls should Gold close this week below the 1238 Fibonacci level however, even if this happened the overall trend still remains positive when applying Basic Dow Theory. This theory dictates that if a market is posting higher-highs and higher-lows on each directional swing, then a Bull trend is in place (arrowed on the chart). Accordingly, Gold would still remain positive as long as it stays above 1211. This is some way below and there are strong support areas before this price is tested. The first support comes in at 1230, followed by 1221. Should Gold close today above 1238, then the Bulls will retain control for next week’s action.

Currencies This week has seen USDGBP in focus again with sizeable price swings. Monday saw the major 1.2661 support breached and this triggered aggressive selling. This continued on Tuesday as the 1922 Committee called for a vote of no confidence in Theresa May. Having survived this, Wednesday staged a recovery after initially posting a low of 1.2476. Both Wednesday and Thursday saw highs back above 1.2661, but crucially failed to close above this point. Early trading today has seen the sellers re-emerge and things favour the Bears as next week approaches. There is a steep trend resistance line containing four points of contact and this is a strong line that will be relevant next week, increasing the pressure on Cable.

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