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During Thursday's trading session, the currency exchange rate broke through most of the technical indicators to end the day at 110.60. On Friday, the rate was located above the 61.80% Fibonacci retracement level at the 110.77 mark.

In regards to the near-term future, most likely, the rate will surge towards the upper boundary of the small pattern line at the 111.00 level.

Moreover, it is expected that the rate will trade sideways to end the day at the 110.80 level.

During Thursday's trading session, the yellow metal depreciated against the US Dollar by the 1633 base points or 1.25% to end the day at 1,285.00. On Friday morning, gold was located above the 23.60% Fibonacci retracement level at the 1,291.93 mark.

In regards to the near-term future, most likely, the yellow metal will trade sideways to end the day above the 23.60% Fibo at the 1,295.00 level.

On the other hand, the resistance of the monthly S1 at 1,295.12 could retrace the rate to push it to depreciate to the 1,285.00 level.

The precious metal extended declines for a third consecutive session with the declines gaining momentum. Gold prices lost close to $18 on Thursday. The declines came amid the general risk appetite turning positive after the initial concerns of a recession that plagued the markets earlier this week. US and China trade talks also contributed to the sentiment as investors shed safe-haven assets.

Can XAUUSD Hold the Support?

The drop in gold prices sent the precious metal to test the support area of 1290.37 – 1284.65. A break down below the support could trigger the descending triangle pattern and could see gold prices posting further lows. For the moment, we expect the support to hold out in the short term but the bias to the downside increases.

The common currency continued to extend losses for a third consecutive session. Economic confidence in the region fell to 105.5 in March, marking the lowest level since October 2016. Data from Germany was also disappointing as inflation eased to a pace of 1.3% on the month in February, down from 1.5% previously.

Can the EURUSD Bounce Off the Support?

The currency pair has extended the declines lower to test the support area of 1.1217. A further extension lower could push the common currency to decline to lows of the 1.1174 region. The Stochastics indicate that the currency pair is strongly oversold and this could offer some short term respite to the upside. Still, the gains are unlikely to come by with the minor resistance at 1.1295 likely to hold the correction.

The British pound fell over 0.87% on the day on Thursday after the UK parliament failed to build a consensus on proposing alternative options for the Brexit deal. This prompted PM May to pull the vote on the deal for another day. The uncertainty on the Brexit continues with the likelihood of a hard Brexit still on the table. The currency extended losses for a second consecutive day.

Will GBPUSD Continue to Fall?

The currency pair has been trading within the range of 1.3312 resistance and 1.2972 level of support for the most part this month. As long as the support level holds, the GBPUSD could maintain this sideways range for a while. The lower support shows a confluence with the rising trend line as well. This adds weight to the view that the support level will likely hold in the near term.

Encouraging talks are said to be taking place on the US Sino issue in the latest days. Various reports indicate the US has made demands for China to change and improve conduct of U.S. intellectual property. Nothing has been confirmed yet, but the fact that both sides are willing to hold meetings and discuss shows some willingness to find a solution. Meanwhile in the US the GDP growth rate dropped to 2.2% for the last quarter of 2018 which raised economic concerns. On the contrary, the dollar strengthened yesterday and today in the Asian session while other major currencies struggled on weak domestic financial data or dovish comments from their central banks. Gold dropped significantly after the US dollar may its equal dominating rally. The inverse relationship the two instruments carry is very obvious. Gold dropped below the 1300 psychological threshold and could be aiming even lower. If the selling interest is to continue we may see Bullion heading even lower and breaking the (S1) 1287.99 support level. Even lower we could see the (S2) 1284.25 and the (S3) 1279.56 support lines. In the opposite direction a rally could send the precious metal towards the 1294.12 resistance level and even surpass it. Above that level we could see the (R2) 1301.78 and he (R3) 1310.17 resistance barrier.

UK: Another vote on divorce deal to be held

Parliament will be asked to vote in for a stripped-down version of the deal, consisting of only the withdrawal agreement. Approving this vote is a necessary for the EU to provide a short extension of the Article 50 process. The idea could be rejected as the Democratic Unionist Party (DUP) along with various lawmakers and party rebels have already signalled opposition. GBP may come under strong volatility during the vote. Cable dropped yesterday as further uncertainty is rising could be rising on Brexit but also a very strong run from the US dollar. If the bearish momentum is to continue we may see cable dropping below the 1.3070 support level and heading towards the 1.2970 support line or even the 1.2913 support barrier. If Cable comes under a buying interest we could see it heading towards the (R1) 1.3175 resistance level. Even higher we could see the pair moving to the (R2) 1.3265 resistance level, with the 1.3350 resistance level being even higher.

Other economic highlights, today and early tomorrow

In today’s European session, we get German Unemployment Change and Rate for March, while form the UK we get the GDP figures for Quarter 4. In the American session we get the Canadian GDP for January and from the US the New Home Sales for February. As for speakers, we have FOMC members Williams, Kaplan and Quarles.

XAUUSD 4 Hour Chart

Support: (S1) 1287.99, (S2) 1284.25, (S3) 1279.56
Resistance: (R1) 1294.12, (R2) 1301.78, (R3) 1310.17

GBPUSD 4 Hour Chart

Support: (S1) 1.3070, (S2) 1.2970, (S3) 1.2913
Resistance: (R1) 1.3175, (R2) 1.3265, (R3) 1.3350

• Sterling is in freefall again after Prime Minister May decides to put her deal to a third vote, but without the political deceleration on a future relationship
• Dollar holds near highs despite lower GDP revision as Treasury yields recover
• Stocks bounce back as bond rally eases and on optimism of US-China trade deal

MPs to vote again on Withdrawal Agreement minus the political declaration

British prime minister, Theresa May, made a last-ditch attempt to get her Brexit deal through Parliament. But with the DUP party still opposed to her deal and the clock ticking to secure a delay to Brexit until May 22, May has decided to push for a third vote by separating the Withdrawal Agreement from the political declaration on the future relationship.

May is hoping that by splitting the vote between the Withdrawal Agreement and the political declaration, there will be enough rebel Labour MPs backing the divorce deal to make up for DUP votes. Labour are mostly opposed to the political declaration because it does not include a customs union. However, voting for the Withdrawal Agreement without having any idea what the future relationship will look like might a bigger risk for Labour MPs and so May’s gamble might not pay off.

The pound fell on May’s latest move as it was seen as only increasing the uncertainty. There is a risk that even if the deal was to miraculously pass, it would open the prospect of a harder Brexit if May steps down as prime minister and her replacement takes a different approach on the future relationship. Should the deal be rejected again, it would put the focus firmly on the next round of indicative votes next week, with the customs union and a second referendum options gaining momentum.

Sterling plummeted by more than 1% yesterday and was last trading 0.2% lower at $1.3015.

Dollar continues to shine even as economy slows

The US dollar outshined its rivals on Friday with the dollar index holding firm near 2½-week highs and advancing to a one-week high against the yen. The greenback was supported by a rebound in Treasury yields with the 10-year moving away from 15-month highs to climb back above 2.4%.

Dollar strength comes despite yesterday’s downward revision to US growth in the fourth quarter. Annualized GDP growth for Q4 was revised down from 2.6% to 2.2% and growth is expected to slow further in Q1. However, with growth slowing faster in other parts of the world and more central banks turning dovish, US yield still look relatively attractive.

The euro and the New Zealand dollar are two currencies that came under pressure this week from their respective central banks sounding more dovish. The euro fell to a 3-week low of $1.1212 yesterday on reports that the European Central Bank could introduce a tiered deposit rate to alleviate the impact of negative rates on banks, suggesting that negative rates are here to stay.

But the kiwi, along with the Australian dollar, managed to bounce back somewhat as risk sentiment was lifted on hopes that the trade talks between the US and China are nearing a successful conclusion.

Stocks up on trade hopes

US officials arrived in Beijing yesterday to resume trade discussion, with US Treasury Secretary Steven Mnuchin saying that talks were “constructive”. The talks will continue next week amid speculation that the negotiations are in the final stages after China reportedly made substantial proposals on key issues such as forced technology transfers.

The latest developments helped detract attention away from recession fears, lifting global stock markets. Chinese equities rallied by more than 3% today and European indices also opened sharply higher, shrugging off Brexit and slowdown worries.

Commodities didn’t benefit from the risk-on higher as gold was under pressure from recovering US yields, while oil prices took a hit from another tweet by US President Donald Trump asking OPEC to increase supply. Gold was last trading at $1291 an ounce and WTI oil was recouping some of yesterday’s losses to rise to $59.77 a barrel.

PCE inflation coming up

Looking at the rest of the day, the Brexit vote in the UK Parliament will the big anticipation. The vote will likely take place around 1430 GMT and the result expected to be close. Revised UK GDP estimates for Q4, due at 0930 GMT will also be watched.

In the US trading session, the main focus will be on US personal income and spending figures, as well as the core PCE price index, which the Fed closely monitors, at 1230 GMT.

GBPJPY is hovering below the crucial 23.6% Fibonacci retracement level of the upleg from 132.50 to 148.85, around 145.00 and the bearish crossover within the 20- and 40-simple moving averages (SMAs) in the 4-hour chart. The technical indicators seem to be flattening in the negative zone, with the RSI pausing upside move slightly above its 30 oversold mark and the MACD ceasing negative momentum below trigger and zero lines. Also, the price is trading well below the Ichimoku cloud and particularly below the red-Tenkan sen line, suggesting more losses ahead.

More southward movement could meet the 144-10-143.70 support area, taken from the latest lows. A failure to hold above this zone, could open the way towards the 143.25 barrier which if broken could trigger a more aggressive sell-off towards the 38.2% Fibonacci of 142.60.

On the other hand, an improvement has the potential to retest the 23.6% Fibonacci mark of145.00, while slightly above this level, the SMAs are standing near 145.35. Further up, the 146.50 resistance, which overlaps with the upper boundary of the Ichimoku cloud could halt upside movements as well.

Looking over the market’s last five-week performance, the pair has been neutral within the 148.40 resistance and the 143.70 support levels, while in the bigger picture, GBPJPY remains bullish.

Sterling slips amid Brexit chaos

The pound is looking a little soft after another chaotic week in Parliament, one in which MPs decisively took back control before indecisively failing to agree on an alternative. Theresa May finally won the backing of numerous hard-line Brexiteers - although her deal being better than no Brexit is hardly a ringing endorsement - before one almost immediately claimed her deal is dead. And the speaker attempted to thwart attempts for a third vote on her deal before agreeing that half of the deal is different enough, unfortunately though that's the half that has drawn the most criticism and may well be rejected today. Chaos.

It may be surprising therefore to see that the pound has turned south this week but hasn't broken any major levels, just moved back to the lower end of its recent range, so traders aren't too gloomy. The reason for this is simple, no-deal remains possible but unlikely. The realistic worst case scenario right now is a long extension and that has its positives and negatives, from a sterling perspective. On the one hand, it's another prolonged period of economic uncertainty but one after which we could end up with a softer Brexit than that on offer, or none at all.

Strong dollar sends gold south

It's been a good couple of days for the dollar, albeit ones that probably owe more to other currencies being weak than the dollar necessarily being strong. Still, it goes to show that once again, the dollar remains a favourite among traders when times are tough, aided of course by the strong US economy and enviable - albeit slowing - growth.

Naturally, a stronger dollar isn't ideal for gold which had seen something of a resurgence. It had already started to stumble, so it's no surprise that this has further taken the shine off it. Near-term headwinds look likely to remain for the yellow metal which could see recent support around $1,280 come under pressure. Next support below here could be found around $1,260 but ultimately, the dollar - and therefore weakness elsewhere - will likely prove decisive on the downside potential here.

Oil prices edge higher on trade optimism

Oil prices are a little higher on Friday, with positive US/China trade headlines certainly supportive. This remains the greatest risk for the global economy so positive headlines are naturally risk positive. It's certainly helping equity markets.

Inventory data this week has shown slightly higher builds than expected which may be holding oil back. US oil rig data today will be closely watched as ever, with the trend since November heading in the wrong direction, although with the country pumping at record levels, it's clearly not having a negative impact yet. That can surely only last so long though if the trend continues.

Cable hit new nearly three-week low at 1.3010 in fresh bearish acceleration in early European trading on Friday, in extension of Thursday's 1% fall. Eventual break of three-day congestion and strong fall that resulted in close below 55SMA (1.3066) generated strong bearish signal for attack at key 1.2980/60 support zone (trendline support/200SMA/11 Mar trough). Weak sentiment and rising bearish momentum weigh on pound as traders await for fresh news from Brexit. UK lawmakers are going to vote for the third time on PM May's Brexit plan today, after the plan was strongly rejected in previous two votes. PM May looks for further Brexit delay that would give her time to eventually get her plan passed through the parliament. On the other side, the EU approved delay from today's original due date when the UK was supposed to exit the union until 12 Apr, with possibility of extension until 22 May, but only if the plan will be approved on today's vote. All options remain on the table and uncertainty remains high that keeps sterling under strong pressure. Break below 200SMA/bull-channel support line would signal further weakness.

Res: 1.3070, 1.3123, 1.3153, 1.3168
Sup: 1.3005, 1.2980, 1.2960, 1.2923