Daily Technical Analysis. Wednesday, December 13
The Euro edged higher during the Asian trading session following the decline to a three-week low yesterday, as the Dollar rallied and markets awaited the results of Central Bank Meetings.
European Markets await the ECB Meeting tomorrow, Thursday, which is expected to see a tightening in Interest Rates and Monetary Policy, and the Bank may announce further details regarding the withdrawal of the Stimulus Program.
Markets are also looking forward to the results of the Fed Meeting. Traders are pricing in a quarter-point increase in the Fed’s target range to 1.25 – 1.5%, in what would be the third upward move in 2017
Ms Yellen is likely to be quizzed on Investors also want to know the Fed’s expectations for Tax Cuts and their potential impact on Growth, as well as Monetary Policy.
Technically, the return of selling pressures on the movement of the EURUSD pair will consolidate the current bearish trend. A break below the support levels near 1.1740 will consolidate the declines and may result in a test at the levels of 1.1715. A price reversal above the resistance level at 1.1770 would ease the selling pressure temporarily.
The royal currency fluctuated in a narrowly bullish range against the US Dollar during the Asian Session on Wednesday. Despite the recent declines, prices still have to break and hold below 1.3300 support levels to confirm a bearish trend. Breaking the resistance levels at 1.3330 would affect the bearish trend and cause the pair to proceed on a sideways movement.
The US Dollar was lower against the Yen on Wednesday, after the Japanese Economy reported a large rise in Industrial Machinery Orders, an indication of corporate capital expansion.
The data boosted the Yen, which was suffering from negative pressure. The JPY also benefited from the current volatility in the Asian Stock Indices market, causing an increase in demand for the Yen as a safe haven.
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 the support levels at 113.202 would allow prices to decline further and may test the 113.00 levels.
On the other hand, a breach of near resistance at 113.35 levels would introduce a bearish trend and prices will possibly test the 113.50 levels.
Technical reading continues to show that prices are still moving within a negative correction to the general upside. Support levels at 0.9890 and 0.9880 are still considered the most important short-term levels and the pair remains above this level. This trend will positively affect the movement of prices on the short-term.
Gold prices edged higher on Wednesday for the second day in a row, and remain close to a five-month low as markets await the release of the Federal Reserve Meeting Minutes today.
A rebound in the price action would reinforce the previous bearish trend. A break below the 1240 support levels would consolidate the current trend and possibly test the 1235 levels. A return above the resistance level at 1245 would temporarily ease selling pressure.