The bearish sentiment towards the Sterling/Dollar descended to new depths on Thursday after the currency pair closed below 1.49 for the first time since April and fell to a fresh eight-month low at 1.486. While part of the reason for this heavy decline in the GBPUSD has been due to the resumption in USD strength throughout the global currency markets, sentiment towards the Sterling has also been eroded by the Bank of England (BoE) Deputy Governor Nemat Shafik disinclination towards a UK rate hike until wage growth has recovered in the UK economy.
With UK inflation rising at a tepid pace, the recurrent fears that the Bank of England may push back raising rates deep into 2016 has reduced investor attraction towards the pound. The Sterling remains vulnerable and this should encourage sellers to attack the GBPUSD with targets pointing towards the lows of April 2015 at 1.456.
From a technical standpoint, this pair is heavily bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has also crossed to the downside. Bears have breached the psychological 1.490 support and this may promote a further decline towards 1.485.
WTI Oil remains under extreme pressure as concerns intensify over the aggressive oversupply in the global markets. Sentiment towards this commodity continues to face punishment as weekly reports from the Energy Information Administration (EIA) consistently show that crude inventories have increased consistently. With investor attraction towards WTI Oil declining rapidly and any hopes of an immediate production cut any time soon highly unlikely, prices may remain heavily depressed for the remainder of 2015. WTI Oil is fundamentally bearish and this dangerous combination of an unrelenting oversupply mixed with the sluggish global demand may provide the momentum to send prices lower towards $32.40.
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Technically prices are heavily bearish as there have been consistently lower lows and lower highs. Prices have found some resistance below the daily 20 SMA and the MACD has also crossed to the downside. A solid breakdown below $35 should encourage sellers to send prices lower towards the December 2008 lows of $32.40.
Gold experienced an aggressive depreciation during trading on Thursday as investors digested the gravity of US interest rates being raised for the first time in almost a decade. The lagged selloff in Gold was expected as the Federal Reserve did succeed in creating a controlled market reaction towards the US rate rise decision. Gold remains heavily bearish and bears have been gifted an opportunity to install another round of selling momentum throughout metals before the end of the year. With any hopes of a recovery in prices discounted, further Dollar appreciation should send this zero yielding metal back towards 1046 and potentially lower.
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