GBPUSD touches ascending trendline, Gold touches support
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GBP Weakens Following Monetary Policy Report
The UK Monetary Policy Report involves Bank of England (BoE) members voting on where to set the nation’s interest rate. The hearing is major news as their engagements usually give strong clues towards future monetary policy.
Following the Monetary Policy hearing, geopolitical tensions have escalated which has increased the demand for safe-haven investments. Also, BoE governor Andrew Bailey mentioned that the rate of disinflation continues to be quicker than forecasted leading to a 25-basis point cut earlier this month.
Following the news, GBPUSD has continued the bearish trend since the beginning of October. However, the price is currently testing the ascending trendline plus the 100 SMA (black line) for potential support and is showing signs of rising to test the 1.2750 pivot soon.
Meanwhile, EURGBP found support from the 0.83 pivot and descending trendline. If the price rises it will test the upper descending trendline which coincides with the 0.8450 pivot for resistance soon.
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G20 Meetings Highlight China’s Free Trade Concerns
The G20 meetings involved finance ministers and bankers from major industrialized countries as they gathered in Brazil for a two-day summit.
The key points raised from the meetings were concerns about conflicts in Ukraine and the Middle East and issues around free trade. China is especially keen on restoring relations with major economies to help stabilize international trade. ?
Given the escalation in conflict following the Ukrainian missile strike on Russia, investors will likely continue driving the price of safe-haven assets such as gold. The price of gold has since jumped over 2% already this week and looks set to continue rising if ongoing conflicts escalate further.
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