Midweek Report 18 December

Gold Last week saw Gold drift lower after posting a high at 1250, and by Friday had dipped to a low of 1232 before recovering to close at 1238. This was an important defence that has produced another dip showing a higher-low than the previous occasion. This maintains the Bull trend and a breach of 1250 would continue this trend according to the conditions of Basic Dow Theory. A firm start yesterday placed this resistance within reach and if breached, could lay the foundation for reaching the next resistance at 1265. Should Gold fail to push on, then 1238 remains relevant on a closing basis, particularly on the weekly chart. 1232 also takes on a greater significance.

Currencies
EURUSD is still struggling to pull away from the 1.1302 level. The Bulls made a strong defence of this level on both 15th August and again on 31st October.
On 12th November, this support finally gave way and aggressive selling saw this pair trade down to a low of 1.1215. The next day however, there was a recovery indicating that the selling was probably triggered by stop activity. Since then, this market has dipped below
1.1302 on several occasions only to see a bounce but the possibility of another down leg remains. There would need to be a print above 1.1442 to negate this prospect, which is quite distant. Currently, the Bulls need to continue defending this 1.1302 support area.

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