Aussie suffers along with Commodities

The Pound is the day’s biggest gainer for a second day, showing a 0.6% gain on the dollar and euro, a 0.7% advance on the yen, and a 1.1% gain on the day’s biggest loser, the Australian dollar.

The Pound printed a seven-month high versus the dollar at 1.3336 while ascending into 21-month high terrain against the Euro. Sterling is now showing an averaged gain of 4.9% no the year-to-date versus the Dollar, Euro and Yen.

Aussie meanwhile, reached 0.7137 low, breaking the 20-day SMA and retesting currently 50-day SMA at 0.7133. Next Support levels for the pair stands at 0.7120 and 0.7095. Resistance comes at 0.7173, and slightly above 2-day highs at 0.7200.

It seems that US data weren’t able to help Greenback gaining some traction against Pound, ahead of Powell testimony. The US advance indicators report revealed two huge but divergent trade and inventory surprises that had offsetting effects on the 2.8% Q4 GDP estimate.

For trade, December surged in the deficit for goods to a $79.5 bln new cycle-high from $70.5 bln in November and a $77.2 bln prior cycle-high in October, as seen in the last goods and services trade report. The sharp widening reflected both a big export drop, of 2.8%, and an import surge of 2.4%, after respective November figures of -0.9% and -3.6%.

The advance goods data imply a December widening in the goods and services trade deficit to a $58.0 bln new cycle-high from $49.3 bln in November and a $55.7 bln prior cycle-high in October, with a 1.7% drop for exports and a 2.0% pop for imports. We also saw a huge 0.9% rise in retail inventories in December that tracked Monday’s reported 1.1% surge for wholesalers, following respective unrevised November figures of -0.4% and +0.4%, leaving another round of December inventory gains that bucked the down draft in commodity prices.

More precisely, we have seen Gold drifting below 1,323 level, retesting the next immediate Resistance at the 20-day SMA, at 1,319. A breach and break of the latter could open the doors to Februart’s low at 1,302.40 and the 50-day SMA, at 1,297.70. To the upside Resistance remains at 1,330-1,333 area.