Gold initially entered Tuesday’s trading session under pressure as President Xi Jinping’s conciliatory message at the Baoa forum soothed concerns over a potential global trade war. However, losses were later recouped thanks to a softening US Dollar.
While the return of risk appetite has the ability to leave Gold depressed and unloved, a vulnerable Dollar could come to the rescue. If the Dollar continues to weaken amid the lingering uncertainty, Gold has the potentially to appreciate further despite the improving risk sentiment. Taking a look at the technical picture, the yellow metal continues to find comfort within a tight range on the daily charts with support at $1324 and resistance at $1360. A breakout above $1340 could encourage an incline higher towards $1348 and $1360, respectively. Alternatively, a failure for bulls to defend $1324 could result in prices testing $1310.
Sterling extends gains against Dollar
Sterling bulls were instilled with fresh inspiration after BoE member McCafferty stated that UK rates should be raised again without delay.
The upside with fueled by ongoing Dollar weakness which elevated the GBPUSD towards 1.4180. With the heightened market expectations of a UK rate hike in May stimulating appetite for the Pound, further gains could be on the cards near term. Taking a look at the technical picture, the GBPUSD is turning increasingly bullish on the daily charts. Prices are trading above the 50 Simple Moving Average while the MACD has crossed to the upside. The currency pair has scope to challenge 1.4230 as long as bulls can defend the 1.4100 level. A scenario where prices sink below 1.4100 could result in a decline back to 1.3920.
Yen weakens on renewed risk appetite
The Japanese Yen attracted a school of sellers on Tuesday as investors lost appetite for safe-haven assets amid the easing trade war concerns.
A vulnerable Dollar offered little support to the Yen’s depreciation with the USDJPY trading around 107.00 as of writing. Taking a look at the technical picture, the USDJPY has found resistance around the 107.00 regions. Sustained weakness below this level could encourage a decline back towards 106.00 and 105.50. Alternatively, a solid daily close above 107.00 may provide bulls with enough confidence to challenge 107.80.
GBPJPY breaks above 151.50
A weakening Japanese Yen has propelled the GBPJPY above 151.50 during Tuesday’s trading session. With the Yen potentially weakening further amid the risk-on mood and Sterling supported by rate hike expectations, the GBPJPY is likely to venture higher. Technical trades will continue to observe if bulls are able to secure a daily close above the 151.50 resistance level. The next key level of interest above 151.50 can be found at 152.60 and 153.10, respectively. A failure of bulls to maintain control above 151.50 could encourage a decline to 150.60.