Midweek Report 15th January

Gold
Gold started this week as it finished the last, hovering circa the 1290 area. Overall sentiment still favours the Bulls but, the main question is whether the 1300 area is too powerful a resistance to breach or, is Gold resting before another push? Perceived wisdom is that the latter is the case from a technical perspective. This comes in the form of a Pennant formation. The long arrow on the chart forms a flagpole and the triangle formation at the top forms the Pennant. For this pattern to confirm another up-leg, Gold would need to break to the upside and post a close above the top of the pole at 1298. Should this happen, then the target for this pattern would be at 1364 however, combining 1298, the psychological 1300 resistance and the failure at 1309 from June 2018, a great deal is needed. Should Gold fail to make the move and confidence evaporates, the first key support comes in at 1276. A warning that a failure could materialise would be a print below the support line of the Pennant that comes in at 1286 for today's action.

Currencies
Two weeks ago, EURGBP looked to be in a strong position after seeing a print up at .9104. This was marginally above the failure high at .9098 from 28th August however, this new high posted on 2nd January was the best the Bulls could manage and there has been a period of volatility with the Bears looking ominous. Looking at the weekly chart below, EURGBP is trading within a broad range of .8650 to .9100. With potential volatility after the Brexit vote this evening, there is material swings may be expected in this currency pair.

VIBHS Financial Review