EURUSD
The Euro saw weak trading during the Asian session on Thursday, after falling sharply yesterday on the recovery of the US Dollar following the release of the Federal Reserve Meeting Minutes.
The Dollar strengthened against the major currencies after the Federal Reserve’s meeting minutes showed that the markets have priced in the gradual increase in interest rates, and indicates confidence in the Feds to reach the inflation target of 2% on the medium to long term.
The Euro Zone’s services sector has released data for the past month with expectations of further improvement, which could help the Euro consolidate and likely weaken against the Dollar. The EURUSD pair has rallied at 1.2000 and is beginning to rebound now as today’s session starts with a bullish bias. However, there is an underlying expectation that the pair might resume the uptrend in the coming sessions, bearing in mind that the price is confined to a bearish sub-channel which we think represents a bullish continuation pattern. A hit on the 1.2045 levels will effect this pattern and push the price to continue the uptrend. But a break in support levels at 1.2000 would cause the price to fall back and possibly test the 1.1980 levels.
GBPUSD
The British Pound fell against the Greenback following developments and Economic Data from both the UK and the US Economies, especially on the verge of disclosing the minutes of the Fed meeting. The PMI reading from the UK showed that the contraction of the spread exceeded expectations for 52.2 compared to 53.1 last November.
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. A break of the support levels at 1.3490 would allow prices to further decline and likely test 1.3450 levels.
On the other hand, a breach of near resistance levels at 1.3520 would cause the market trend to become bullish and possibly test 1.3550 levels.
USDJPY
The USD found support after the minutes of the Fed meeting were released yesterday, which saw members’ consensus on the continued gradual increase in interest rates as well as optimism about achieving the inflation target in the medium to long term. This pushed the Yen lower, and caused a recovery to Asian stocks, with some stocks hitting a 10-year high.
Technical reading continues to show that prices are still moving within the framework of a positive correction to the general bearish trend. Resistance levels at 112.80 and 112.90 are still considered to be the most important short-term levels. These levels are likely to support the bearish trend of the market. On the other hand, any short-term trend reversal will negatively affect price action.
XAUUSD/GOLD
Gold prices fell on Thursday for a second straight session after the Federal Reserve’s December meeting minutes were released, indicating an optimistic outlook on interest rates from the bank’s members, helping to boost the dollar.
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. The only break of support levels at 1300 would allow prices to retreat further and may test 1295 levels.
On the other hand, a breach of near resistance levels at 1309 would consolidate the bearish trend and possibly test the 1314 levels.
