Daily Technical Analysis. Wednesday, December 06
The Euro is experiencing weak movements during the Asian Session on Wednesday, after falling yesterday, as the Dollar rose against major currencies and the Brexit talks failed.
Despite recent declines, the pair still has to break below the support levels at 1.1830 and 1.1800 in order to confirm the continuation of the decline. The breach of the resistance levels close at 1.19850 would affect the recent bearish trend and cause the pair to proceed on a sideways movement.
The royal currency fluctuated in a tight range slipping back into the trading range on Wednesday as the Dollar strengthened against a basket of major currencies.
Technical reading shows that prices are trying to catch a breath after the recent strong rally. The bullish scenario remains effective, and breaking the support levels at 1.3400 would allow the pair to retreat further and perhaps test the 1.3370 levels. At the same time, a breach of near resistance levels at 1.3435 would invite buyers to enter the market and possibly test 1.3470 levels.
The US Dollar fell against the Japanese Yen on Wednesday for a third session in a row as we see a recovery on the Yen, supported by a decline in Asian Stock Indices, which increases demand for safe haven assets. The Yen’s rise also occurred despite the strengthening of the Dollar against major currencies, which reflects the strong demand for the Japanese currency.
Despite recent declines in the USD pair, prices still have to break and hold below the support level at 112.10 to confirm the continuation of the decline. The breach of the resistance levels close at 112.30 would affect the recent bearish trend and cause the pair to proceed a sideways movement.
According to the chart for the movement of the pair over the four hour period, we notice a negative divergence with the RSI.
Gold prices fell on Wednesday to trade near a two-month low, on the back of rising Dollar levels and market optimism about the possibility of passing the US Tax Cuts before the end of the year. The return of selling pressures on the movement of the yellow metal will strengthen the current downward trend.
The break below the near support levels at 1264 will consolidate the declines and open the door to test the 1260 levels alone. The return of the price above the resistance level at 1267 would ease the temporary selling pressure.