EUR/USD likely to find a peak near 1.25: UBS
After reviewing the developments to ensure a permanent peace deal between Russia and Ukraine, I anticipate that the big question of the day has been what security guarantees for Ukraine could look alike in a possible peace deal with Russia, and a success on this front will provide a definite clue to the gold bugs who look ready to provide a directional move to the gold futures which are teetering at a pivotal point as the investors have also an eye over the Jackson Hole symposium for a cue on interest rates decision.
Following a meeting earlier today, members of the “coalition of the willing” commented on the issue, noting that guarantees must deter Russia from attacking Ukraine again in the future, while some countries have said they are ready to contribute with boots on the ground; however, President Donald Trump said the US will not be doing that.
Undoubtedly, the US President has already stated that the US is willing to assist with aspects of security, for instance, possibly through air support, but emphasized that joining NATO can’t be the primary form of security Ukraine relies on.
On the other hand, efforts are still intact for finalizing the locations for both the bilateral meeting between Ukrainian President Volodymyr Zelensky and Russian President Vladamir Putin, as well as the subsequent trilateral meeting that would include President Donald Trump but still a success on this front seems full of skepticism, and that will keep the movements of gold futures indecisive for some more time.
Technical Levels to Watch
On Wednesday, gold futures edged higher, rebounding after losing ground this week amid heightened uncertainty over U.S. interest rates before a key central bank conference, after testing a low at $3354 while on Thursday, gold futures are facing stiff resistance at the 9 DMA at $3386 due to the formation of a bearish crossover in the daily chart as the 9 DMA has come below the 20 DMA at $3396, and look ready to find a breakdown below the immediate support at the 50 DMA at $3380.
I anticipate that if the gold futures find a breakdown below the immediate support at $3369, next target will be at the 100 DMA at $3335 as the surging bearish pressure looks evident enough to push the futures to test the next significant support at the 200 DMA at $3210 before this weekly closing as the surging hopes over this peace deal could continue to extend bearish pressure.
Disclaimer: Readers are advised to take any position in the gold futures at their own risk, as this analysis is only based on observations.