Currency Updates:
Gold tumbles 11% amid heavy selling
The euro (EUR) continues its correction against the US dollar (USD) amid thin news, the pair is moving to complete its technical direction. It looks like the single currency is completing a long cycle and will consolidate in the 1.30 level after lower lows. Later today, the European Central Bank (ECB) president, Mario Draghi is expected to speak about the ECBs activities in the European Parliament in Strasbourg.
? The US dollar (USD) has continued its slide against the Japanese yen (JPY) moving as low as 95.86 before correcting to 97.50. Expect further losses as the pair continues its lower low trend.
? The Australian dollar (AUD) looks like reversing a negative trend against the US dollar (USD). The Aussie had dropped to 1.0290 before moving upwards to 1.0370. Look for resistance at 1.0405.
? Weekly option volatilities for the EURUSD have risen slightly to 8.20. The sharp drop in gold has obviously left no market unaffected with the EURUSD looking for fresh direction. As fear enters the market expect appreciating option premiums.
Gold (XAU) dropped a whopping 160 dollars per troy ounce yesterday to 1322 US dollars amidst heavy trading. Markets have been selling the precious metal heavily since last Thursday. The selloff was supported by a slowdown in Japanese growth and an overall selloff of commodities but was sparked by rumours of a Eurozone member selling its gold reserves as part of an EU bail-out package. Looking ahead some correction may occur while the overall direction is negative amidst the sharpest fall in 30 years.
