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    Afternoon Report – Monday 12th August

    THE DAILY REPORT

    AFTERNOON REPORT

    TOP THINGS TO KNOW

    Gold stalls on mixed trade headlines, bears eye a 23.6% Fibo level

    (FXStreet 12/08/2019) - Spot gold has travelled between a low of $1494.96 to a high of $1509.40 on Friday, ending Wall Street around 0.50% in the red as the precious metal struggles to maintain the bullish momentum, despite the DXY falling 0.20% on the day. While gold may be sagging into the close, for the week, gold has climbed 3.5% with respect to futures and based on the most-active contract’s finish on August the 2nd.

    December gold on Comex lost $1, or less than 0.1%, at $1,508.50 an ounce. Trade wars are at the helm driving prices. The gold and silver ratio ended down -0.63% having travelled between 88.84 down to 88.02 as silver prices continue to hold in there while gold lags. Silver prices ended the day modestly higher by 0.17% within a range of $16.86 and $17.14, ending around $16.98 on Wall Street.

    Mixed trade headlines

    Initially, gold found a bid on the White House's decision to hold off on granting licenses for US companies to purchase some Huawei equipment following Beijing's halting of US crop purchases. However, risk aversion spiked on reports to the contrary and that U.S. won’t ease Huawei restrictions. Nevertheless, the two and fro of such headlines are another reminder of the recently deteriorating outlook for US-Sino trade negotiations.

    "Global assets will have to grow accustomed to the reality that trade uncertainty is likely here to stay, which ultimately has consequences for asset prices and for the growth outlook. At the same time, as the pressure on China's economy weighs on the RMB, which was allowed to weaken below the 7.0 mark, the President is likely to continue urging the Fed to lower rates which in turn could provide some positive tailwinds for gold and silver," the at TD Securities analysts argued.

    Gold levels

    However, in the absence of further trade war escalation, on a break back below the 1480s, a deeper retracement back to the 1430s could play out once the 23.6% Fibo in the 1450s gives. On the flip side, To the upside, the 1528/30s comes as a prior support area which could come in as the next major upside target where the price would be expected to hold initial tests. Then, bull swill look to the 127.2% Fibo target which is located around 1,560. This guards territory to then the Oct 2012 highs at 1795 come into the picture on the wide. The 1800s come as the 2011 highs and the price has touched the 61.8% Fibo retracement of those highs to the late 2015 swing lows.

    GBP Futures: neutral/bearish near term
    (FXStreet 12/08/2019) - According to preliminary figures from CME Group, investors trimmed their open interest positions for yet another session on Friday, now by around 4.5K contracts, Volume, instead, reversed three consecutive drops and rose by almost 8.3K contracts.

    GBP/USD focused on 1.2000... and below

    Cable is trading closer to the critical support at 1.2000 the figure pari passu with speculations of a ‘hard Brexit’ outcome at the end of October. Declining open interest amidst falling prices could remove some tailwinds from the leg lower in the near term, although the attention remains well on 2017 lows in the 1.1990/85 band.


    UK Labour’s Abbott: ‘Who has confidence in PM Johnson’s government’

    (FXStreet 12/08/2019) - In an interview with Reuters, the UK’s opposition Labour Party's Abbott noted that the following comments, when asked about a vote of no confidence in the UK government.

    Who has confidence in PM Johnson’s government.

    If we go to such a vote, we want to know we can win it.

    The Cable remains exposed to downside risks amid increased no-deal Brexit fears, now looking to extend the recent recovery above the 1.2050 level.

    TRADE OPPORTUNITIES

    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    GOLD 30 Minute – Short positions below 1505.50 with targets at 1490.00 & 1481.00.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    GBPUSD 30 Minute – Short positions below 1.2055 with targets at 1.2015 & 1.1990.

    WHEAT Daily – Short term rebound towards 546.

    SP 500 Daily – Short positions below 2980.00 with targets at 2820.00 & 2720.00.

    SILVER Daily – Long positions above 16.3500 with targets at 17.7000 & 18.2000.

    HANG SENG Daily – Short positions below 26920 with targets at 25400 & 24550.

    AUDNZD Daily – Our next up target stands at 1.0690.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
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    Posted: August 12, 2019 | 5:42 AM