Midweek Report 5 Feb

Gold
Last Thursday, Gold touched a high of 1326, marginally above the 1325 resistance that was created on 11th May 2018. This work area (circled on the chart), was likely to provide an obstacle for the Bulls whilst heading towards their 1366 objective. After slipping back for the close, both Friday and yesterday saw gentle selling, taking Gold back towards 1310. This is above the first support at 1300 and the major support at 1276. These two levels along with 1250, have been created by using the ‘Change in Polarity Principle. This is where a resistance level is breached and then switches to the support column, and can be effective when a market is in a solid trend. Currently, the Bulls remain in control despite the current pullback.

Currencies
Since 21st May 2017, .8620 has been acting as a long-term support for EURGBP. This was demonstrated in April 2018 and again just two weeks ago. Most recently, there was a print at .8617 that was briefly causing concern however last week, this currency pair enjoyed a sharp recovery taking prices back to the mid-.8750's. In the other direction, the top end of this broad sideways range comes in at .9100. This area has also seen three tests since 2017 that produced sharp rejections. Even a wide sideways trading range such as this is not indefinite, but it may remain until the Brexit solution is agreed.

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