The Euro rose on Wednesday to its highest level in three years, following a sharp drop in US Dollar levels and the anxious expectations of a European Central Bank (ECB) reference to stimulus withdrawals this year at the ECB Meeting.
The three-year low in the Dollar helped the Euro rise significantly in today’s session and the pair’s success in breaching near resistance levels at 1.2320 will strengthen the optimism and push the price test to 1.2360 levels. A return below 1.2300 support will temporarily ease the bias.
The royal currency fluctuated in a narrowly bullish range after reaching yesterday’s highs since June 24, 2016 on the back of UK Data release.
Technical reading is however, positive for the pair and price action is expected to continue its rally until price targets 1.4055
The Dollar fell against the Yen, pushing the Yen to a five-month high following strong Export Data, which paves the way for a stable growth. Japan’s Exports rose for the 13th consecutive month in December due to record demand from China and Asia as a whole, raising Japan’s strong economic growth prospects in the fourth quarter.
Japanese Stocks however, fell during today’s trading, helping to boost the Yen as an alternative investment in the markets. This is as a result of the Bank of Japan’s decision yesterday to stabilize Interest Rates and leaving Monetary Policy unchanged, indicating that a continued stimulus program to reach the huge inflation target.
Technically, the return of selling pressures on the pair’s movement would reinforce the current bearish trend. A break below the support levels near 109.80 will consolidate the declines and would cause a test at the levels of 109.40. However, a price reversal above the resistance level at 110.00 would temporarily ease selling pressure.
The return of the pair’s renewed pressure on the pair’s movement would consolidate the current bearish trend. A break below the support levels at 0.9530 would consolidate the pair and cause a test at 0.9470 levels. A price reversal above the resistance level at 110.00 would temporarily ease selling pressure.
Gold managed to rise and hit its highest level this week as the new sell-off hit the US Dollar and pushed it to a new three-year low, causing Gold to trade near a four-month high.
The US Dollar has fallen again as expectations remain that global Central Banks are on track to pull stimulus programs and tighten monetary policy, reducing the gap between them and the Federal Reserve.
Despite recent gains in Gold prices, it still has to break above stability levels at 1342 and 1344 to confirm a continued uptrend. A drop below 1337 support level would affect the recent uptrend and introduce a sideways trend.