The EUR opened the week with a limited downside gap and soon rallied to cover this gap to keep the single European currency stable, ahead of European Central Bank President Mario Draghi’s testimony to Parliament today.
The Euro, like the rest of the major currencies, weakened against the US Dollar on Friday after a strong Job Report from the US, and further weakened significantly against other currencies to maintain its previous levels and gains. Mario Draghi’s testimony before the European Parliament today, might throw light on the ECB’s continued Stimulus Policy as well as its outlook for Inflation and Growth in the coming period.
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 1.2440 would allow prices to fall further and may test 1.2420 levels. At the same time, a breach of near resistance levels at 1.2470 would invite buyers to enter the market and possibly test the 1.2500 levels
Technical reading of the GBPUSD pair shows that prices are moving within a negative correction to the general upside. The support levels at 1.4080 and 1.4030 are still considered the most important short-term levels and the pair’s strength above these levels would ensure continued uptrend.
As the areas of 1.4080 are important support areas, any indication of a change in direction on the short term would positively affect the movement of prices.
The US Dollar fell against the Yen on Monday after gains in the previous week as the Yen received support from the sharp decline in Asian Stock Indexes, thereby causing an increase in the demand for alternative investments, led by the Japanese Yen.
Technical reading indicates that the movements of the Japanese Yen may stop this week at the dollar levels, especially as Investors are cautious following the US Government Funding matter. However, despite recent gains, the pair still has to break above the resistance at 110.00 and 110.40 to confirm the continued rally.
A drop below the close support at 109.80 would affect the recent uptrend and cause a sideways trend.
Gold prices are trading near a two-week low at the beginning of the week as negative pressure on the precious metal continues since the end of last week after the Dollar rose strongly supported by the US Jobs Report Data.
The current decline in Gold levels comes amid rising yields on Government Bonds, which have become attractive to Investors, especially with expectations of more monetary tightening by global Central Banks.
The return of selling pressures on the pair’s movement will reinforce the previous bearish trend. A break below the support levels at 1324 will consolidate the pair and cause a test at the 1315 levels alone. The return of the price above the resistance level at 1334 would temporarily ease selling pressure.