Comments from NATO meeting send Gold and USD/PLN higher

Investors who were unease about the ongoing Russia/Ukraine conflict now have even more to worry about. US President Joe Biden traveled to Europe this week to meet with NATO allies and discuss the situation. After the meeting, headlines released said that NATO is preparing for the risk of Russian nuclear incidents. In addition, Biden told NATO that he supports increased NATO troops on the Eastern front. Oh, and did I mention that the G-7 plans on warning Russia over its use of chemical and nuclear weapons? These comments will only increase the tensions between Russia and the West, causing further uncertainties. As a result, funds are flowing into the safe-haven asset of Gold.

Gold had been in a symmetrical triangle since April 1^st, 2021 before finally breaking above the top trendline of the pattern on February 11^th near 1850. In addition, Gold had formed a double bottom in mid-2021 and broke above the neckline of the pattern on the day Russian invaded Ukraine, February 24^th, near 1916. The target for the double bottom is near 2150.

Source: Tradingview, Stone X

XAU/USD moved to a recent high of 2070.46 on March 8^th, testing the all-time highs at 2075.11 from the summer of 2020. Since then, price pulled back and held support at the breakout of the double bottom pattern. On today’s headlines from NATO, price bounced into resistance near the low from March 11^th at 1958.75. This is also near the double 38.2% Fibonacci retracement from the highs of March 8^th to the lows of March 16^th. Additional resistance is at the 50 % retracement and the 61.8% Fibonacci retracement from the same timeframe at 1985.45 and 2006.76, respectively. Support is at the March 16^th lows near 1895.17, then horizontal support at 1879.47. If price breaks below there, the next level of support isn’t until the top, downward sloping trendline of the long-term triangle (see daily) near 1845.

Source: Tradingview, Stone X

USD/PLN has a strong positive correlation with Gold. The current correlation coefficient between Gold and USD/PLN is +0.81. Any reading above +0.80 is considered strong. Just as with Gold, USD/PLN began moving aggressively higher after Russia invaded Ukraine, above previous all-time highs at 4.3078 on March 2^nd. The pair continued higher and made a new all-time high on March 7^th at 4.6199. Since then, USD/PLN pulled back to horizontal support at 4.2042 and has been moving higher since.

Source: Tradingview, Stone X

On a 240-minute timeframe, the correlation coefficient is even higher than on the daily at +0.87, USD/PLN is currently sitting at trendline resistance near 4.3384. A move above targets Fibonacci retracement levels from the highs of March 7^th to the recent lows on March 17^th, starting with the 38.2% level at 4.3565. Above there is the 50% retracement level and horizontal resistance at 4.4068 and 4.4416, respectively. Support is at the recent lows of 4.204 and the 61.8% Fibonacci retracement from the February 10^th lows to the March 7^th highs at 4.1832 (see daily).

Source: Tradingview, Stone X

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.