Daily Technical Analysis. Monday, December 04
The Euro opened the week lower against the Dollar before consolidating and offsetting some of its losses, as the situation in the EuroZone stabilized amid attempts by the German Chancellor to form a new coalition government.The US Dollar recovered after the Senate approved the tax cuts, helping the Dollar and the yield on US Government Bonds rise to push the Euro lower as the week begins.
Despite recent declines in the pair, prices still have to break and hold below support levels at 1.1860 and 1.1830 to confirm the continuation of the decline. Breaking the resistance levels close at 1.1880 would affect the recent bearish trend and cause the market to proceed on a sideways trend.
The British Pound fluctuated in a narrowly bearish range at the start of Monday’s trading after making its fourth consecutive weekly gain against the US Dollar in the previous week following developments in the UK Economic Data.
Technical reading shows that prices are trying to catch a breath after the recent strong rally, with no signs of a general upward trend change. Only breaking support levels at 1.3460 would allow prices to retreat further and likely test 1.3430 levels. On the other hand, a breach of near resistance levels at 1.3475 would invite buyers to the market and possibly test the 1.3500 levels
The US Dollar continued to rise against the Yen on Monday following support from US Senate approval of US Tax Cuts, which helped boost negative pressure on the Yen.
Despite recent gains, the pair still has to break above the resistance at 112.90 to confirm the continuation of the uptrend. A drop below the near support at 112.70 would affect the recent uptrend and result in a sideways trend.
Gold prices fell during Monday’s trading to continue the downward spiral of the past two weeks, as the Dollar recovered after the US Senate approved the US Tax Cut Bill. The yield on US Government Bonds rose after recent positive US Data, which also increased negative pressure on Gold prices.
The return of the selling pressures on the Price Action would consolidate the bearish trend. A break below the support levels near 1274 will further consolidate the declines and cause a test at the 1270 levels. The return of the price above the resistance level at 1277 would however, temporarily ease the selling pressure.