Good morning, fellas.

The economic calendar will be offering traders a couple of high impact economic events, with UK retail sales and Philly Fed manufacturing index from the US, which will be the main highlights of the day. The ECB is more or less likely to be the same with its policy, but it will be interesting to see their remarks about coronavirus and its impacts on the economy.

UK – Retail Sales m/m – 9:30 GMT

The Office for National Statistics is due to release the retail sales data at 9:30 GMT. It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity. In January, the retail sales slipped by -0.6% vs. the forecast of -0.8%, extending slight support to Pound.

This month, economists are expecting a jump of 0.7% in retail sales. A positive number of sales indicate strong inflation and growth in the economy. Therefore, the Sterling bears can face challenges on Thursday.

XAU/USD – GOLD – Daily Analysis

The yellow-metal prices hit fresh 7-year highs near the $1,613, rising 5.7% during this year so far, mainly due to the risk-off market sentiment in the wake of Intensifying coronavirus fears. As of writing, gold is currently trading at $1,611 and is consolidating in the range between the 1.608 – 1.615. However, gold prices have increased by more than 4% from $1,547 to above $1,600 during the last two weeks.

At the USD front, the US dollar picked up a bid again after upbeat economic data as well as the safe-haven demands which have also been supportive to the USD, with the DXY rising to around a 45-month high.

As a result, the S&P500 SPX hit a new high overnight, mainly due to China’s stimulus measures. The key event for the greenback came in the form of the Federal Reserve Minutes, although they did not give any worse release in the market, which resulted in a muted response in the FX and precious metal space.

Looking forward, we have the Philadelphia Fed survey, which is usually seen as the most representative barometer of regional manufacturing, given the mix of industries in the Philadelphia Fed region.

This data is expected to fall back to 11.0 vs. 17.0, which if confirmed, would raise concerns about the impact of COVID-19 on US output, while the PMI data are scheduled on Friday, so we will have a better knowledge about how stable the US is proving to be by the end of the week.

Daily Support and Resistance
S1 1586.03
S2 1597.42
S3 1604.59
Pivot Point 1608.81
R1 1615.98
R2 1620.2
R3 1631.59

The precious metal gold continues to trade bullish, hitting our previously suggested target level of 1,611. At the moment, XAU/USD is trading at 1,610, and the bullish bias still seems pretty dominant. The higher high pattern on the 4-hour timeframe is suggesting odds of bullish trend continued until the next target level of 1,621. Although the bullish trend is stronger, the support prevails around 1,602 today. Let’s consider trading it with a bullish bias today.

Good luck!