The Euro has managed to maintain its position above the crucial 1.0800 level against the US Dollar, creating a sense of optimism in the market. The recent uptrend has seen the pair break above the 1.0825 resistance level and settle comfortably above the 200 and 100 simple moving averages on the 4-hour chart. This indicates a strong bullish sentiment among traders. Furthermore, the pair has surged above the 50% Fib retracement level, signaling a potential move towards the 1.0900 level in the near future.
However, there is a key resistance level at 1.0860, where a connecting bearish trend line lies. A clear break above this level is essential for further gains towards 1.0950. On the downside, immediate support is seen at 1.0820, followed by a more significant support level at 1.0800 and the 100 simple moving average. A breach below 1.0800 could trigger a retest of the 200 simple moving average at 1.0750, with further downside potential towards 1.0720.
In contrast, Gold prices have experienced a decline, with bears pushing the price below the $2,350 support zone. This downside movement indicates a shift in sentiment towards safe-haven assets, possibly due to improving risk appetite in the market. The weakening of Gold prices could be attributed to the positive outlook surrounding major currencies like the Euro and the US Dollar.
Looking ahead, GBP/USD is poised to gain bullish momentum if it can successfully clear the key resistance level at 1.2750. A breakthrough above this level would pave the way for further upside towards 1.2800 and beyond. However, failure to surpass 1.2750 could lead to a correction lower, with support levels at 1.2700 and 1.2650 coming into play.
On the economic front, the German IFO Business Climate Index for May 2024 is forecasted to be at 90.3, showing a slight improvement from the previous reading of 89.4. Similarly, the IFO Current Assessment Index and Expectations Index are expected to show positive signs, indicating a potential uptick in business sentiment in the coming months. These forecasts suggest a strengthening economic outlook for Germany, which could have a ripple effect on the broader Eurozone economy.
While there are positive signs emerging in the EUR/USD pair, traders should exercise caution and closely monitor key resistance and support levels to navigate potential market volatility. Additionally, developments in the Gold market and economic indicators like the German IFO Business Climate Index should be closely watched for further insights into the market direction.