Gold appreciated during Monday’s trading session, with prices challenging $1260 as market uncertainty over U.S tax reforms softened the Dollar.
Investors are adopting a cautious approach ahead of a vote in Congress on tax reforms, a sentiment that could support Gold. Taking a look at the technical picture, the yellow metal still remains in a downtrend on the daily charts despite Monday’s appreciation. Price action suggests that Gold is currently in the process of a technical bounce, with strong resistance found at $1267. If the current upside momentum losses steam before $1267 then prices are at risk of edging back down towards $1250. Sustained weakness under $1250 could open a path back towards $1236 and $1230,respectively.
Dollar softens on tax reform caution
The Greenback weakened against a basket of global currencies on Monday ahead of a U.S Congress vote on tax reforms. With the Dollar finding itself increasingly sensitive to the Trump tax developments, the outcome of the key tax vote may spark explosive levels of volatility. Technical traders will continue to closely observe how the Dollar Index behaves below the 94.20 resistance level. Sustained weakness below 93.50 could encourage a further depreciation towards 93.20 and 90.00 respectively. Alternatively, a decisive breakout above 94.20 should open a path to 94.60.
Currency spotlight – EURUSD
The Euro appreciated against the Dollar on Monday morning after Eurozone Final CPI improved to 1.5%, matching market expectations. With the economic calendar for the Eurozone area fairly light today, Dollar weakness is likely to continue supporting the EURUSD short term. From a technical standpoint, the EURUSD is trading within a wide range on the daily charts, with support at 1.1730 and resistance at 1.1850. A failure of prices to break above 1.1850 may encourage a further decline towards 1.1730 and 1.1680 respectively. Alternatively, if bulls are able to conquer 1.1850, then the EURUSD could trade towards the 1.1920 regions.
Bitcoin bulls eye $20,000
Bitcoin sprinted to a record high over the weekend following the launch of futures by financial market giant CME Group (CME).
The growing involvement of renowned financial institutions in the Bitcoin markets is seen by some investors as another step towards legitimacy, and further upside could still be on the cards. From a technical standpoint, the cryptocurrency is incredibly bullish on the daily charts with prices trading around $19000 as of writing. With the current upside momentum showing no signs of slowing down, $20000 could be an end of year target.
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