Daily Technical Analysis. Wednesday, December 20
The Euro advanced for the third consecutive day to trade at its highest level this week, with support from higher German Bond Yields and a weaker Dollar.
The US Dollar has seen a decline due to the House of Representatives’ re-vote on the Tax Bill.
Despite recent gains, EURUSD prices still have to break above stability levels at 1.1860 to confirm the uptrend. A drop below the support levels at 1.1830 would affect the current uptrend and cause the market to proceed on a sideways movement.
The Yen declined against the Dollar during the Asian Session on Wednesday, recovering from yesterday’s low of the week. The recovery comes as markets await the results of the BoJ Meeting this week, as well as the decline of the Dollar against its major counterparts.
The Bank of Japan will announce the results of its last meeting this year, with expectations that the Bank will keep its Monetary Policy unchanged for now.
Technically, the positive key to a continued bullish trend is the breach and stability above the 113.10 resistance levels. However, a drop below the near support at 112.80 levels, would affect the current uptrend and introduce a sideways trend.
A reversal of the USDCHF pair’s renewed pressure would reinforce the previous bearish trend. A break below the support levels at 0.9840 would consolidate the pair and cause prices to attempt a test at the 0.9820 levels. The return of the price above the resistance level at 0.9860 would temporarily ease the selling pressure.
Gold prices advanced on Wednesday, after trading near two-week highs yesterday, as the Dollar levels have steadily declined since the beginning of the week on the back of the tensions over the vote on Tax Reform.
Despite recent rallies, prices of the yellow metal still have to break above stability levels at 1265 to confirm a continued uptrend. A drop below the near support levels at 1263 would affect the recent uptrend and introduce a sideways trend.