The last week saw a sharp sell-off in the EUR across the board, while gold prices endured a steady sell-off towards its 50-DMA. The sell-off in the EUR has been extended further today, with the EUrR/USD pair falling to 1.0519, while Gold trading at USD 1200/Oz levels.
EUR/JPY drops, extends losses below expected level
The weakness in both the assets was anticipated last week. I would begin the review with the bearish view on the EUR/JPY pair titled “EUR/JPY: More weakness ahead†(Macro Scan) published on April 7th. The report talked about the pair 129.00 levels, anticipating a 150-pip fall. The pair did dip to 129.00 on April 9th and extended losses further to hit a one month low of 126.51 levels today. The possibility of Greece witnessing another round of election has triggered fears of Grexit, thereby leading to a sell-off in the pair.
Relative strength in GBP correctly anticipated, EUR/GBP drops to 0.7202
The EUR/GBP forecast titled “EUR/GBP: Eyes 0.7200 after BOE rate decision†(Euro Pound Forecast) published on April 9th, talked about the relative resilience in the British Pound (GBP/USD) pair as compared to the EUR (EUR/USD). The technical rationale also payed out as anticipated, as the pair suffered sharp losses once it fell below 0.7241 levels, while gains were repeatedly capped at the falling trend line resistance. The pair fell to a low of 0.7202 today.
Gold reports continue to do well
The Gold forecast titled “Inverted Head and Shoulder failed, could drop to 50-DMA†(Gold Price Analysis) published on April 8th, anticipated a drop in Gold to its 50-DMA, then stationed at USD 1195/Oz. The report clearly anticipated a drop to USD 1195, and was devoid of any data/event dependency. The metal hit a low of USD 1192.5/Oz on April 9th, post, which we have seen a steady recovery to a high of USD 1209.2/Oz today.
Ahead in the week, economic data in the US is likely to start showing an improvement. Moreover, first-quarter is usually the weakest in the US, while the same is strongest in the Eurozone. UK retail sales figures could provide interesting trade setups in GBP cross, while Chinese economic data, coupled with Greece uncertainty could heavily influence the safe havens. We keep our eyes open.
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