Gold Prices Tests 2019 Lows, GBPUSD Recovers on EURGBP Drop - US Market Open
GBP: The Pound has made a slight recovery from intra-day lows (1.2686) to reclaim the 1.27 handle as EURGBP pulls back from the 200DMA situated at 0.8792, which in turn could see the cross end its record win streak. However, the outlook remains soft for the Pound, given the continued turmoil in UK politics. Elsewhere, UK data surprised to the downside as the CBI reported that new orders had fallen to the lowest level since the October 2016 as UK manufacturers remain concerned over the ongoing Brexit uncertainty. UK inflation to be released tomorrow, although, data remains on the side-lines.
AUD: Gains in the Australian Dollar were faded after the RBA Governor explicitly stated that the central bank has an easing bias, something we have flagged for some time now (full story). Governor Lowe highlighted that lower rates would support employment and help lift inflation towards target, as a reminder, the RBA stated that a rate cut scenario would need to see inflation remain weak, while the unemployment rate would need to tick up, as such, with this being the case, a rate cut looks set to take place at the June 4th meeting. Alongside this, given the continued uncertainty regarding the trade war tensions between the US and China, the outlook remains soft for AUDJPY.
Gold: Equity markets are slightly firmer this morning after the US announced that they would provide a temporary ease on Huawei restrictions. Consequently, Gold prices have edged lower, having a made a technical break below trendline support from the 2018 low, which in turn could see a test of the 2019 low ($1266).
Source: DailyFX, Thomson Reuters
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WHAT’S DRIVING MARKETS TODAY
- “Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low” by Nick Cawley, Market Analyst
- “AUDUSD Risks Return to Flash Crash Lows as RBA Commits to Rate Cut” by Justin McQueen, Market Analyst
- “EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play” by Paul Robinson, Currency Strategist
- “Euro Price Slide Set to Continue as European Elections Draw Closer” by Martin Essex, MSTA, Analyst and Editor
- “Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor
--- Written by Justin McQueen, Market Analyst
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