Market Commentary: Key Levels On GBPJPY & Gold, 13th May 2013

Trading Setups / Chart in Focus:

GBPJPY – Sterling/dollar uptrend intact; looking for buy signal from support

The GBPJPY lost slight ground today as the uptrend took a breather. The market looks like it might want to test value down near 153.50 – 154.00 before pushing higher again. If we do see this retrace lower continue and move down into that zone of key support between 153.50 – 154.00, we will watch closely for price action strategies to buy the market and trade back in-line with the overall up trend.

Spot Gold – Spot Gold still contained below $1,485.00

The spot Gold market has weakened recently and we can see that it’s been contained below $1,485.00 for the last couple of weeks. The fakey strategy that we discussed in our May 7th commentary has seen price fall lower after some sideways consolidation, demonstrating how patience is your friend in the market. Resistance up near $1,475.00 – $1,485.00 is really the ‘line in the sand’ right now to the upside, and we could quite easily see a pop higher to re-test that resistance this week. Based on the price action in this market, we see that resistance zone as a solid value area to look for sell signals with the potential for a 20 to 40 point move lower or more. Key support is not seen until down near $1,360.00 – $1,330.00 area.

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Forex Commentary:

In the currency markets today, the U.S. dollar gained ground versus the Japanese yen and euro for the third consecutive trading session on the back of strong U.S. retail sales numbers.

The greenback was higher against the other major currencies today as well as speculation mounts that the Federal Reserve will scale back its asset buying program later this year.

Other Markets:

In the U.S. markets today, stocks ended the day basically unchanged as they took a breather after moving to record highs last week.

The Dow lost 26.81 points, or 0.18 percent, the S&P 500 gained 0.07 of a point and the Nasdaq added 2.21 points, or 0.06 percent.

Upcoming important economic announcements (New York time): 5/14/2013

5:00am EST: Euro-zone – German ZEW Economic Sentiment
5:30am EST: Australia – Annual Budget Release