Daily Technical Analysis. Monday, December 18
The single currency of the European Union, the Euro, fluctuated in a narrow upward range during the Asian session on Monday as the Dollar weakened against a basket of major currencies.Technically, a rebound in selling pressures will reinforce the existing bearish trend. Breaking below the near support levels at 1.1755 will consolidate the pair and cause a test tat he 1.1730 levels. However, a price reversal above the resistance level at 1.1770 would temporarily ease the selling pressure.
The British Pound saw gains during the Asian trading session after hitting its lowest level in two weeks at the end of last week while trying to move on a positive trend, as volumes declined upon the stability of the US Dollar.
The new round of Brexit talks has helped boost European markets today and also giving a boost to the Pound Sterling.
On the other hand, the US Economy will this week, release Data on Growth in the Third Quarter as well as the vote on the draft Tax Reform Law, which may likely affect the movements of the Property Data this week.
Despite recent declines in the GBPUSD pair, prices still have to break and hold below the support levels at 1.3300 to confirm the continued decline. However, a break at the resistance levels close to 1.1333 would affect the bearish trend and cause the pair to proceed on a sideways movement.
The USDJPY pair was slightly lower on Monday as the Dollar weakened against its major counterparts, as markets are pricing in the vote on the US Tax Reform Bill, as well as the Growth Data for the US Economy, which will be released this week.
Japan’s current account surplus expanded from November to a real reading of 0.36 trillion Yen against a consensus forecast of a surplus of 0.27 trillion Yen.
Technical reading shows that the USDJPY pair is trying to absorb the recent selling pressures. With no clear signals to change the overall bearish trend, the pair has managed to breach the resistance levels of 112.80 which would allow the market to correct on the upside, and perhaps cause the second resistance test at 113.00. A break at the support level of 112.60 would however, consolidate the bearish trend.
The price of Gold increased during the Asian Session on Monday in light of weak traded volumes in the markets. Gold prices are still under negative pressure as USD levels consolidate against major currencies.
The lack of clarity still clearly affects the market’s trading with no strong signs of a possible price break in any direction. A break above the 1260 resistance level or below the 1250 support level would give more clarity to the expected movement which would be the same direction as the break.