The Euro traded weakly during the Asian trading session on Tuesday, after yesterday’s sell-off with the start of correction on the European currency after the surge in the past period.
EuroZone Inflation Data, which came in lower than expected last Friday, encouraged the bearish trend on the single European currency, especially as the Dollar rallied against major currencies to offset part of its gains.
Despite recent declines, prices still have to break and hold below support at 1.1950 and 1.1930 to confirm the continued decline. Breaking the resistance levels close at 1.2000 would affect the recent bearish trend and establish a sideways trend.
The Pound fluctuated in a narrowly bullish range during the Asian session on Tuesday against the US Dollar following Developments and Economic Data that followed the British economy yesterday.
Technically, in the near term, we are still waiting for a definite breach with the pivotal resistance 1.3585 to confirm a return to the main bullish trend and then achieve positive targets starting at 1.3610
Breaking the 1.3555 support level will push the price back to the downside correction and possibly support 1.3535 levels.
The US Dollar was lower against the Yen on Tuesday, with the Yen rallying higher. After four sessions of decline, the recovery came on the back of better-than-expected Japanese Wage Data which helped the Yen recover losses despite strong Asian stocks.
The average wage in the labor sector during the month of November rose by an annualized 0.9% from the previous reading by 0.2% while expectations were up 0.6%.
The Japanese Government continued to demand that Japanese companies raise wage rates in order to increase Household Spending and support Inflation Rates. As recent data indicates, some companies seem to have responded to this appeal.
Technically, the return of selling pressures on the pair’s move would reinforce the previous bearish trend. A break below the support level near 112.40 would consolidate the pair and cause a test at 112.20 levels. The return of the price above the resistance level at 112.65 would ease selling pressure temporarily.
Gold prices fluctuated during Tuesday’s session for the third session in a row as negative pressure continued following the Dollar’s strength due to positive data and interest rate expectations.
The Federal Reserve is on track to raise Interest Rates three times this year, despite weak data from the employment sector released by the US Economy last Friday.
Technically, a buy back would reinforce the current bullish trend. The success of the pair in breaching near resistance levels at 1320 will boost optimism and push the price test to 1325.
Only a return of prices below the resistance level of 1318 would temporarily ease the optimism.