XAUUSD investor interest in gold rises again

XAUUSD investor interest in gold rises again. The precious metal is correcting upward but is still below the psychological level of 1800.00, trading around $1793 an ounce. The news of detecting a new strain of coronavirus in South Africa has made serious adjustments to the dynamics of prices in world markets. Air carrier stocks plummeted on the back of statements from the EU, UK, and India about tightening border controls and restricting flights to South Africa.

The number of new speculative positions in gold increased for seven weeks in a row, and from 168.4K reached the January levels of 259.8K. The weekly report on changes in investor positions by the Commodity Futures Trading Commission (CFTC) will publish tonight, but the week will be the eighth consecutive week of growth.

When oil is sharply declining, and the USD Index is unstable, gold remains the only protective asset with sufficient capacity, and this week will show how much investors are ready to trust it. Of course, there are still expectations regarding the tightening of monetary policy from the US Federal Reserve, but in the current conditions of uncertainty, the regulator may take a break, which will also benefit the instrument’s quotes.

Support and resistance

The price has returned to a sideways channel on the global chart, below $1800 per ounce. After last week’s decline, technical indicators are uncertain: the fast alligator EMAs move close to the signal line, and the AO oscillator histogram forms downward bars near the transition level.

Resistance levels: 1830.0, 1871.0.

Support levels: 1764.0, 1721.0.

EUR/USD Current level – 1.1912

The common European currency continues to depreciate against the dollar as yet another support level, this time the one at 1.1957, was easily violated at the end of last week. The forecast is for the sell-off to continue, pushing the currency pair towards a test of the support at 1.1860. In the positive direction, the key resistance level is 1.2028. This week, investors’ attention will be focused on the European Central Bank interest rate decision (Thursday; 12:45 GMT) and the CPI data for the U.S. (Wednesday; 13:30 GMT).

EUR/USD Current level – 1.1969

After the successful breach of the important resistance zone at 1.1920, the EUR continued to gain positions against the USD. A continuation of the rally and an attack of the high at around 1.2010 is the most probable scenario at the time of writing the analysis. If a retracement develops, it should be limited to the support at 1.1924. This week, the most important economic news that could have a significant impact on the currency pair, is the data on the consumer price index in the Eurozone (10:00 GMT), the ISM Manufacturing data for the U.S. (15:00 GMT) on Tuesday, as well as the Non-farm Payrolls change and the Unemployment rate in the U.S. (Friday; 13:30 GMT).

The EURUSD pair corrects, trading around the level of 1.1231.

The EURUSD pair corrects, trading around the level of 1.1231.

The European currency received some support after the data on business activity in the EU was released. French Manufacturing PMI for November reached 54.6 points instead of 53.6 for October. A similar indicator in Germany was 57.6 points, which corresponds to 57.8 points a month earlier. Manufacturing PMI in the EU countries is at 58.6 points, higher than 58.3 points for the previous period. Service PMI in France increased to 58.2 points from 56.6 points earlier. The same figure in Germany was 53.4 points, up from 52.4 points earlier. Finally, the EU Service PMI stood at 56.6 points, significantly better than the 54.6 points for October.

The positive trend of the European currency could not reverse the downtrend of the pair, which is under pressure from the growing US dollar. Yesterday, the American currency index renewed its year’s high around 96.560, when it became known that the candidacy of the incumbent head of the US Federal Reserve, Jerome Powell, was nominated for a second term. According to US President Joe Biden, the department under the leadership of Powell operates most effectively.

Support and resistance

On the global chart, the price moves below the support line of the global downtrend channel, and the sell signal from the indicators is strengthening: indicator Alligator’s EMA fluctuations range expands, and the AO oscillator histogram decreases in the sell zone.

Resistance levels: 1.1368, 1.1560.

Support levels: 1.1215, 1.1100.

GBP/USD Current level – 1.3486

Last week’s sell-off was limited to the level of 1.3427, but the Cable is now struggling to move above the level of 1.3500. If the bulls manage to breach the mentioned resistance, the corrective phase should continue towards the next target of 1.3575. If the bears stop the bulls’ attempt to dominate the market in its tracks, а breach of the support of 1.3427 would be the most likely scenario. A breach of the aforementioned level would strengthen the negative expectations for the future path of the Cable, leading to new losses for the pound against the dollar and a move towards 1.3407.