The Euro continued to rise at the beginning of the week to trade near a three-year high, a level which it hit by last weekend. The recovery comes as the Dollar weakens and the EuroZone economy improves.
The Euro’s positive performance came after European Central Bank monetary policy makers said in the Minutes of the Bank Meeting in December that they could reconsider their stance on stimulus in early 2018, boosting expectations that they are preparing to curb the massive Monetary Stimulus Program.
On the other hand, the US Dollar continues to fall sharply against the major currencies to a three-year low, as US Inflation Data came in least than expected, threatening the future Interest Rates to help raise the levels of the Euro.
The pair’s success in breaching near resistance levels at 1.2220 will boost the optimism and push the price test to 1.2240. A return below 1.2180 support would temporarily ease the bias.
The British Pound rose against the US Dollar on Monday after reaching its highest level since 2016 on Friday as Economic Data from the British Economy was sparse in the last week.
In the near term, we are still waiting for a definite breach in the pivotal resistance of 1.3750 to confirm a return to the main bullish trend and then achieve positive targets starting at 1.3785. However, breaking the support level at 1.3730 will push the price back to the downside correction track and possibly support 1.3700
The US Dollar is trying to rise against the Japanese Yen on Monday after reaching its lowest level for the Yen to receive positive support, especially after the remarks by the Governor of the Bank of Japan. The BoJ Governor confirmed his intention to continue with the Monetary Stimulus. In addition, the Bank’s recognition of economic expansion and moderation helped on optimism, pushing the Yen higher.
The return of the selling pressure again on the movement of the USDJPY pair will strengthen the current bearish trend. A break below the support levels near 110.60 will consolidate the declines and cause a test at 110.25 levels. A return of prices above the resistance level at 110.80 would ease the pressure temporarily.
Gold prices rose to a four-and-a-half-month high on Monday after hitting a five-week high as the US Dollar weakened.
The US Dollar has seen a sharp drop in trading today to a three-year low as Inflation continues to drop which could likely force the Federal Reserve to slow down on raising Interest Rates.
The technical reading for the precious metal is positive for the price movement and there exists a clear control of the buyers on the trades. Price action is expected to continue its rally until price targets 1348.