End of Week Report 25 Jan

Gold Weekly Recap
Last Friday, Gold broke the support line from a Pennant formation ending the possibility of a rally. Once this happened, the first support of note the Bulls needed to defend was at 1276, which occurred on Tuesday and again yesterday. Early trading today sees this market trading circa the 1280 area, but more is required before today's close to ease nervousness.

Gold the Week Ahead
Although the Bulls are undoubtedly be disappointed the Pennant formation failed last Friday, they will be pleased at making a defence of the 1276 support. There remains more to do to calm the situation, but even if 1276 were to give way, the Bulls will remain in longer-term control whilst staying above 1250 on a closing basis. To the upside, there are still obstacles standing in the way of further gains. The first is the recent high at 1298 coupled with the psychological 1300 level. The main resistance sits at 1309, the high failure from 14th June 2018. This was a heavy work area back then will be very tough to breach.

Currencies
GBP has made significant gains against USD this week after witnessing end-of-week profittaking last Friday. Early trading today sees this pair trading just above 1.3100 and within sight of a major resistance level up at 1.3169. This is an important Fibonacci level and is the 38.2 Retracement of the sell-off that began on 17th April 2018. A major question would be whether GBPUSD will make a push towards this level, or will there be another bout of Friday profit-taking? Where this market closes today in relation to this resistance level will be an important factor going into next week’s action.

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