British Pound Forecast: Proving Resilient, Bullish Breakouts in Progress
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British Pound Outlook:
Despite some weakness on the day, the British Pound has been noticeably resilient during the US Dollar’s recent rally – a good omen for future British Pound strength.
GBP/JPY and GBP/USD are in bullish breakout territory while EUR/GBP is below multi-month range support, suggesting that British Pound strength may be just getting started.
Retail trader positioning suggests a mixed bias to GBP rates.
Sterling Weathering the Storm
The UK is in unchartered waters, just weeks into its post-Brexit reality separated from the European Union. There have been some rude wakeup calls along the way, including the recent row over UK shellfish being banned from being sold in the EU. UK Prime Minister Boris Johnson has been criticized over his vaccine rollout plans as the B117 mutation spreads rapidly.
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Central Bank Watch Overview:
The commodity currencies have stumbled out of the gates in 2021. The Canadian Dollar in particular has proven weak as the country’s vaccination rates have slowed.
Still, none of the central banks tied to the commodity currencies (AUD, CAD, NZD) have seen either rate cut or hike odds move meaningfully.
Central Banks Kick into Gear
Now into the second month of the year, central bank activity is heating up again. Earlier on Thursday, the Bank of England’s “Super Thursday” produced a strong reaction in the British Pound, thanks in part to a key consideration: they would not move to negative interest rates, even if they suggested banks take preparations for such an event.
Gold Price Forecast: Once More, All That Glittersâ¦Not Gold - Levels for XAU/USD Advertisement
Gold prices have followed silver prices lower as the day trading frenzy has hit rough waters.
Gold prices are fully below their daily 5-, 8-, 13-, and 21-EMA envelope, holding in bearish sequential order.
According to the IG Client Sentiment Index, gold prices have a bearish bias.
Gold Prices Mirror Silver’s Fall
Gold prices may not have proven as volatile as their precious metal brethren, silver, but as is often the case, the precious metals complex moves synchronously. The plunge in silver prices (see: Silver Price Forecast: The Next GameStop? Levels for XAG/USD) is not a surprise, given the efforts by institutional finance to reassert control over the narrative in markets; silver is not GameStop, after all. But as the air comes out of this very short-term media-hyped bubble – the bump in silver prices lasted all but three days – gold prices remain vuln
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Technical Forecast for the Euro: Neutral
Selection matters in the EUR-crosses, as each major pair is seemingly in its own world. EUR/USD has struggled while EUR/JPY has rallied, and EUR/GBP is still in Brexit’s thrall.
Significant technical levels have been reached in each of the three major EUR-crosses in recent days.
The IG Client Sentiment Index suggests that most EUR-crosses have a mostly bullish trading bias.
Euro Proves Relatively Boring
January was an exciting month for many reasons, and for the Euro, this was true to vary degrees, but mostly negative. Coronavirus vaccination rates have been incredibly slow across Europe, much slower than the UK and the US. With lockdowns ongoing, economic data remains sluggish, providing little reason for traders to lift the Euro higher. But then again, the Euro hasn’t made much progression or regression either: neither EUR/JPY nor EUR/USD rates move
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Silver Price Forecast Overview:
Silver prices are proving sluggish as January comes to a close, with the uptrend from the coronavirus pandemic low coming into focus as critical support soon.
It remains the case that long-term technical studies still suggest that a bottoming process is underway, and even a near-term pullback in silver prices has not and may still not disrupt the narrative.
Recent changes in sentiment suggest that silver prices retain a mixed outlook in the near-term.
Silver Prices Not Gaining Traction
Silver prices have had some tough sledding at the start of 2021. A stronger US Dollar, relatively higher US Treasury yields, and near-term economic weakness due to near-record daily coronavirus infections in developed economies provoking lockdowns have all contributed to a weaker environment for silver prices. Silver prices are down over -3.6% thus far in