Yahoo Finance Sterling Highly Sensitive to Brexit Noise, Gold Weakens
It has been another explosively volatile trading week for the British Pound thanks to the endless Brexit noise and political uncertainty in Westminster.
Sterling’s price action has been erratic due to the growing sensitivity towards Brexit-related headlines and news flows. With investors clearly pessimistic over Theresa May’s trip to Brussels concluding on a positive note, the Pound is likely to take a hit if she comes home empty-handed with no deal in place. While the British Pound remains fundamentally bearish, there is still some light at the end of the tunnel for bulls. If the government ends up extending Article 50 in an effort to prevent a no deal outcome, this removes a major element of uncertainty over Brexit. However, a major risk accompanied by extending Article 50 is that the UK may be trapped in a Brexit limbo.
Focusing on the technicals, the GBPUSD staged an impressive rebound mid-week thanks to Brexit noise. Interestingly, prices jumped higher this morning after British Chancellor of the Exchequer Philip Hammond said that UK lawmakers could vote on a revised Brexit deal next week. Although the GBPUSD is currently trading around 1.3074 as of writing, bears can still make an appearance if prices sink back under the psychological 1.3000 level. We see the GBPUSD testing 1.3108 in the short term.
Commodity spotlight – Gold
Gold extended losses from a 10-month low this morning as investors engaged in a bout of profit-taking.
Regardless of recent losses, gold bulls remain in control, with further upside expected as geopolitical risks and a ‘patient’ Fed boost attraction for the precious metal. We see Gold extending gains in the coming weeks amid Dollar weakness and concerns over plateauing global growth. In regards to the technical picture, Gold is heavily bullish on the daily charts as there have been consistently higher highs and higher lows. Traders will continue to closely observe how prices behave above the $1330 level.
WTI Oil bulls eye $57.50….
Oil is trading around $57.50/bbl at the time of writing and set to register another week of gains, extending gains from the week prior.
Attempts by OPEC+ producers to limit output may have gotten a helping hand from Saudi Arabia halting production at the world’s largest offshore oil field due to an accident, potentially leaving the Safaniyah facility offline until March. US sanctions on Iran and Venezuela are expected to further squeeze global supply, with hopes of rebalancing Oil markets.
Looking at price action, Oil has broken above the $54/bbl resistance, so this level may transform into an immediate support line in the near-term. The next line of resistance will likely come at $57.50/bbl, while the downside may find further support at $55.20/bbl.
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This article was originally posted on FX Empire
