Since the British Pound closed in the bearish zone at the end of the first week of October, it continued to lose against the greenback this past week where it plunged more than 140 points and made a new fresh low of 1.5910. The Manufacturing production data along with the trade balance figures were not impressive and caused the investors to go bearish on the pair, as it already had pressure since the services sector did not expand considerably last month.
Nevertheless, this coming week would be a substantial one for the pair as there are high impact economic indicators due to be released that include inflation numbers, PPI input, unemployment rate, and retail sales. All these factors contribute to the U.K. economy significantly. The pair closed at the 1.5960 level where it would remain under the control of bears as long as it trades below the 1.6070 resistance level.
The euro did not have any high-impact economic indicators in the past week, but the German trade balance and German industrial production showed good signs of recovery.
However, the pair failed to break its top at the 1.3600 resistance level after which it bounced back sharply and the bulls/bears fight continued. Apparently, the euro closed at 1.3548 level which is below the 1.3564 critical level hence it can be considered as bearish as far as the technical levels are concerned.
The upcoming week has good, solid fundamentals due where investors are eying on German ZEW economic sentiment, European industrial production, current account, and inflation numbers. Traders should feel safe to short the pair as long as it trades below the very important resistance level of 1.3675.
Gold and Wall Street
The concerns regarding the government shutdown in the U.S. eased this past week where the U.S lawmakers are apparently getting closer to get on a consensus on raising the debt ceiling, doing so could avoid a huge downfall in the market and as well as the default of the U.S. economy. Secondly, the Federal Reserve might see Janet Yellen as a new chair very soon who is said to continue the easing measures.
While on the other hand, gold fell badly on Friday where a huge sell order of 5000 lots brought it down to 1262 after which it closed at 1271 and is bearish for now.
To contact the reporter of this story: Jonathan Millet at email@example.com