The Euro fell for a fourth consecutive session to trade near two-week lows, as the Federal Reserve is expected to raise Interest Rates at its meeting this week.
The US Dollar may continue to consolidate this week, awaiting the results of the Federal Reserve meeting, where an interest rate hike by 25 basis points is expected. The ECB has also indicated to continue its stimulus program until it reaches its inflation target of 2%, which has caused weakness in the Euro levels due to the continuing gap in Monetary Policy between the ECB and the Federal Reserve.
The return of selling pressures on the EURUSD pair’s movement would reinforce the previous bearish trend. A break below the support levels at 1.2260 will consolidate the pair and open the door to test the 1.2220 levels alone. The return of the price above the 1.2300 resistance level would temporarily ease selling pressure.
The British Pound weakened against the US Dollar during the Asian Session on Monday as the Dollar gained against the major currencies. Also contributing to the lacklustre effect, was the absence of Economic Data from the British economy yesterday Monday.
Technical reading continues to show that prices are moving within the framework of a negative correction toward the general upside. The support levels at 1.3910 and 1.3890 are considered the most important levels on the short term, and the strength of the pair above these levels would restore confidence for buyers thus introducing a bullish trend. Therefore, an indication of change in direction on the short term will positively affect the movement of prices.
Gold fell during Monday’s trading session trading near two-week lows, as the Dollar stabilizes and expectations of US Interest Rates rise.
On the other hand, the yield on US Bonds increased, which has attracted more investors at the expense of the precious metal. Bonds are usually a good option for investors given that they provide a positive return rather than just storage of value.
A price reversal would in essence, reinforce the previous bearish trend. A break below the support levels near 1309 will consolidate the declines and possibly cause a test at the 1300 levels. A return of the price above the resistance level at 1314 would temporarily ease selling pressure.
Crude Oil prices fell during Monday’s trading after rising last weekend following reports on the number of oil rigs operating in the United States, to show growing concerns about the global supply glut.
The US Worker Excavators Report indicated positive numbers and the production volume as reported by IEA also came in strong.
Technical reading indicates that despite recent gains in Oil prices, the black gold still has to break above the resistance levels of 62.10 and 62.55 to confirm a continued uptrend. A drop below support at 61.90 would affect the recent uptrend and introduce a sideways trend instead.