Volatility in precious metals hits extreme levels
The trading action in precious metals once again took center stage this week, as the price of gold suffered its largest one-day decline in over seven-years. Gold had been trading at an all-time high just seven days ago, with the yellow-metal hitting $2,070 per ounce. As the decline gathered pace gold eventually plunged towards the $1,880 support level before recovery back above the $1,950 level. Silver also suffered from extreme volatility this week, and reversed from $29.50 level down to $23.00 area as traders sold the metal as gold prices started to break under the psychological $2,000 support level.
- XAUUSD is only bullish while trading above the $1,980 level, key resistance is found at the $2,050 and $2,080 levels.
- XAUUSD is only bearish while trading below the $1,980 level, key support is located at the $1,920 and $1,880 levels.
UK jobs worries
The British pound came under pressure against the US dollar and the euro currency in early week trade, following bearish jobs data from the United Kingdom economy. Unemployment data this week from the United Kingdom showed that nearly 750,000 people have lost their jobs during the COVID-19 pandemic. Traders and investors remained optimistic as the official Unemployment remained steady at 3.9 percent. The FTSE 100 rallied towards the 6,300 level this week before falling back on profit taking, while sterling suffered a mixed trading week, and eventually recovered back towards the 1.3100 resistance level.
- The GBPUSD pair is only bearish while trading below the 1.3090 level, key support is found at the 1.3000 and 1.2950 levels.
- The GBPUSD pair is bullish while trading above the 1.3090 level, buyers may test towards the 1.3130 and 1.3200 resistance levels.
Bitcoin suffered a mixed week on the cryptocurrency market as the number one crypto failed to break above its current yearly tradin high, around the $12,100 level. Bitcoin dropped back towards the $11,100 support area, following bulls inabilility to form a new month high. The BTCUSD pair also suffered from during the extreme price drop in precious metals, and a resurgence in the US dollar currency greenback. Bitcoin has shared an increased price correlation with the price of gold and silver over recent weeks, as traders are seen to be moving into both metals and Bitcoin as a hedge against the falling value of the US dollar.
- The BTCUSD pair is only bearish while trading below the $9,800 level, key support is found at the $9,200 and $8,400 levels.
- If the BTCUSD pair trades above the $9,800 level, buyers may test towards the $11,900 and $12,500 resistance levels.
The New Zealand dollar remained muted against the US dollar this week as the Reserve Bank of New Zealand kept interest rates unchanged, and offered extremely bearish commentary to market participants. The central bank outlined that the domestic economy remains in a fragile state, and that the rising value on the New Zealand dollar is hampering the ongoing economic recovery. The RBNZ also expanded its current bond purchases this week in response to the ongoing COVID-19 pandemic, which continues to harm the nations economy. The NZDUSD offered only a muted reaction to the central banks decision, and traded close to the best levels of the month.
- The NZDUSD pair is only bullish while trading above the 0.6700 level, key resistance is found at the 0.6750 and 0.6805 levels.
- If the NZDUSD pair trades below the 0.6700 level, key support is located at the 0.6650 and 0.6600 levels.