The Euro stumbled into the trading week under selling pressure, with prices dipping below 1.2000 as investors took profit after a recent rally.
With Europe’s improving economic conditions supporting the Euro and Dollar weakness still a recurrent market theme, the outlook for the EURUSD remains bullish. Investors may exploit the current technical correction back towards the 1.1920 support level resulting in elevated prices higher in the medium to longer term. From a technical standpoint, the EURUSD fulfils the prerequisites of a bullish trend on the daily charts, as there have been consistently higher highs and higher lows. Prices are trading above the daily 20 SMA while the MACD has crossed to the upside. A technical bounce from 1.1920 could encourage an incline towards 1.2000 and higher. Bulls remain in control above the 1.1850 pivotal level.
Sterling balances above 1.3520
Sterling/Dollar struggled for direction during Monday’s trading session with prices currently trading around 1.3546 as of writing.
The story around Sterling’s erratic price action continues to revolve around Brexit developments and political risk. With uncertainty over Brexit still weighing heavily on the currency, there is a suspicion that the driver behind the GBPUSD’s recent gains is based on Dollar weakness. Technical traders will continue to closely observe how prices react around 1.3520, with sustained weakness below this level opening a path back towards 1.3440. Alternatively, if bulls can defend 1.3520, then the next level of interest could be found at 1.3600.
USDJPY blocked by 113.20 resistance
The USDJPY edged lower during Monday’s trading session, after the 113.20 resistance level enticed bears to instil fresh rounds of selling. Sustained weakness below the 113.20 level could encourage a further decline back towards 112.00. Alternatively, a scenario where bulls are able to break above 113.20 may open a path higher towards 114.40.
Commodity spotlight – Gold
Gold bulls were surprisingly hesitant to make an appearance last Friday and were even missing in action on Monday, despite the U.S economy adding a disappointing 148,000 jobs in December.
While Gold could experience a technical correction as investor’s profit-take, the metal still remains bullish on the daily charts. With the Dollar still in a depressed state amid low inflation concerns, Gold is likely to remain supported moving forward. Taking a look at the technical picture, the yellow metal is bullish on the daily charts. A weekly close above $1320 could signal further upside with $1333 acting as the next level of interest.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.