Top three charts of the week: GOLD, GBPUSD, Oil WTI

Summary:

• GBPUSD balances on the edge

• The gold rally is at its best

• Oil WTI bounced off the support level at $51.

At the beginning of today's analysis, let's take a look at the GBPUSD currency pair. The British pound has not seen much volatility recently, but sellers are pushing the exchange rate lower and lower. The pair slumped to a new low last week and  is trading below the 1.2100 handle. The trend is still downward therefore, even in spite of attractive risk-reward ratio, one should be cautious when looking for long positions. Technically speaking, there is a chance for double bottom pattern to be painted, but given uncertainties around the Brexit, there are few reasons to be more optimistic. Boris Johnson is still standing up to his words that he is going to bring Britain out of the Union by the end of October this year. The latest ComRes survey shows that 54% of respondents are in favour of the statement that "Boris Johnson must lead the Brexit at all costs, even if it is necessary to omit parliament in the process". At today's session, the pound is trading slightly higher, thanks to slightly better-than-expected macroeconomic data. At 9:30 a.m. (BST), we had data on wages and unemployment in the UK. The unemployment rate rose by 0.1%, while average wages were in line with expectations, but there were fewer applications for unemployment benefits than in the previous month. In case the green zone is broken, a downward move towards the 1.1800 handle, where the 161.8% exterior retracements can be found, cannot be ruled out.

Source: xStation5

Gold extends rally

The second instrument of interest for us is gold.  We can observe a real rally on the precious metal market. Gold has been in a strong upward move since the mid-May. We saw a break above the 50% Fibo level of the downward wave started in 2011. According to the Fibonacci methodology, breaking above one retracement paves the way towards the next one - in this case 61.8% retracement level.. The nearest resistance is therefore at the $1591 handle. As the upward momentum is really strong, stubbornly looking for reversal signals can be a risky play. The boom we are witnessing is caused by a few factors, with the US-China trade war being on top of the list. Investors are channeling their funds towards safer assets and declines on the stock markets seem to confirm this view.  

Source: xStation5

Oil WTI bounced off the support level at $51

The last instrument to be analysed is WTI crude oil. A break below the upward channel occurred recently. After stemming declines, price rallied towards the lower limit of the channel but failed to break above. In turn, downward trend on the oil market was confirmed. However, as long as the price zone at $51.50 is defended there is a chance for prices to reviist the resistance at $64.50. However, do note that the zone at $51.50 has already been tested several times and each subsequent test will increase likelihood of breaking lower.. In such a scenario, one could expect price to move towards the 61.8% Fibonacci, where the key support zone is localized. 

Source: xStation5