Gold collapses below $50

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Market news

The scarce news release regarding prices has driven the financial market into a consolidation phase as for the start of this week. Even though there was an overnight drop in commodities due to Gold supply exceed, the greenback kept its ground. The yellow metal has fallen to a five year low at $1,100 with over $50/oz. a minute. This may be the aftermath of the Chinese gold release, triggering a wave of stops and gaining selling pressure. This pressure although was thoroughly felt also in silver and platinum prices.

EUR/USD: The focus – supports at 1.0818/762.

Looking at the 21 week exponentially moving average, analyses show us that the forecast is grey. As of last week, the action remains mostly bearish this week also. The same analyses pinpoint a so called Equality point on medium term at 1.0762, taking into consideration the May low of 1.0818. Below these points, investors should also keep an eye at 1.0586/19 as next threshold and also the next lows which will certainly come throughout the day.

USD/CAD: Net spec shorts still increasing.

In the near future we can say the price action and trend-following indicators will move the pair higher. The first thing we have to watch will be the level of 1.3066 which was the high from 2009. If we use Fibonacci’s retracement we can see that the 167% ratio is at 1.3079, the next major resistance that the pair have to break to go further. On the other side our key short-term support is around 1.2835.Wholesale sales are down 1.0% this month because in four subsectors (which represent 65% of the economy) the results were negative. Overall the without motor vehicle and parts subsector the decline of wholesale sales was 0.6%.

AUD/USD: Currently trading 0.7377, high: 0.7420, low: 0.7366.
The pair sprung down when Asian markets opened and Gold collapsed due to supply. The trend is sideways though, springing from the low of 0.7326 to 0.736, bouncing back to 0.7345 and up again to 0.7389.
For the RBA session this morning, expectations were that the policy will shift towards neutral grounds now whit the recent improvement of China’s data front. Governor Glen Stevens’s decision was to leave the cash rate unchanged at 2.0%. The decision, coming after two 0.25% cuts this year only, is within expectations, the Aussie recovering over 50 cents. Although forecasts are still grim regarding consumer spending and business investment, RBA stated its reluctance to cut rate any further, motivating that more data is needed in order to assess rate impact. An eye should still be kept on the Aussie, Secretary John Fraser declaring today that a housing bubble is starting to take in Melbourne. RBA’s opinion is clear: the currency still has to fall in the near future.

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