GBP/USD The British pound broke down rather significantly during trading on Monday, as Teresa May announced that the Brexit deal wasn’t going to be voted on. By doing so, it shows that the Brexit deal could very well be a thing of imagination, and that of course is going to be very negative for the British pound overall. The down trending line above is the top of the descending triangle, and that means based upon the measurement we could go down to the 1.22 handle after that. I believe that the 1.27 level above is massive resistance as it was previously massive support. I don’t think that it’s going to be able to be bought anytime soon, at least until there’s some type of agreement or at least the semblance of one.
WTI Crude Oil The WTI Crude Oil market initially tried to rally during the trading session on Monday but found the downtrend line at the top of the consolidation triangle a bit too much and rolled over again to test the bottom. I think at this point, if we break down below and it should be noted that we closed at the lows of the day, I think that breaking below the $50 level will probably unwind oil down to somewhere near the $47.50 level. Ultimately, I think we are waiting to see which direction we finally break, and with the production cuts not lifting the market that suddenly becomes a very ominous sign. Will have to see how things shake out, but below $50 I think that the sellers will come in and jump all over this market. If we break to the upside, we need get above that downtrend line in order to reach $55, followed by $57.50 later.
Gold prices fell $5.41 an ounce on Monday as a rebound in the dollar prompted some investors to lock in gains from a recent rally to a five-month high. XAU/USD initially headed higher, but was unable to pass through the resistance in the $1252-$1248 zone. As a result, prices broke below $1245.50 and visited the support at $1241 as anticipated.
If the bulls can defend their camp in the 1241/0 zone, we will probably revisit 1252/48. A break above 1252 could foreshadow a move to 1261/0, which is the next solid resistance on the charts. The bears, on the other hand, have to pull prices back below the hourly cloud (1242.40) to gain momentum for a test of 1241/0. If XAU/USD drops below 1240, look for further downside with 1236 and 1233 (the top of the 4-hourly cloud) as targets