Daily market report
The US Dollar continues to fight for a clear direction since the beginning of the week as investors focus is shifting to the FED rate decision that is scheduled for next Wednesday.
US GDP came out above expectations at 2.9% in Q4 despite rising recession concerns. Following the release, the US Dollar managed to hold steady against its peers. However, it is important to note that the US economy grew at a higher pace of 3.2% in Q3.
Moreover, initial jobless claims fell to 186K compared to 205K forecasted.
As of today, the ECB president Lagarde’s speech is likely to bring additional volatility to the Euro pairs and should be followed carefully.
In the US, the core PCE price index is likely to rise from 0.3% to 0.2%, in addition, forecasts are pointing to an increase inf pending home sales from -4.0% to -0.9%
Now, let’s have a look at the latest price action developments in the major currency pairs alongside gold.
The Euro traded sideways as buyers failed to push prices above the 1.0930 barrier.
In the short term, the trend turned sideways, and the pair is trading inside a 100-pip range located between 1.0930 and 1.0835. Therefore, prices are likely to stabilize in the coming hours, until we see an increase in volume.
A break above 1.0930 resistance can lead to another acceleration higher in the direction of 1.1000 psychological barrier, while a breakdown below 1.0835, should lead to a larger correction that can reach 1.0780 support.
The British pound remains strong despite the lack of important economic releases from the UK this week.
Meanwhile, the bullish trend is lacking momentum, and traders should keep an eye on 1.2440 as it is considered as an important resistance level. Since the beginning of the month the recent rally stalled three times at the same level, confirming its importance.
If the pair do not break above that barrier in the coming hours, then another move lower can be expected, and sellers might look for a retest of the 1.2340 hourly support followed by 1.2285.
On the other side, a daily close above 1.2440 should boost demand and push prices toward the 1.2500 mark.
USDJPY got rejected from a key technical resistance in the near-term which was mentioned in our previous report.
This level stands at 130.60 and sellers should remain in control while prices continue trading below it. Technically, we can see another extension lower in the direction of the 129.00 followed by 128.70 level in the coming hours. In addition, traders should note that the daily trend remains bearish, which reinforces the negative outlook in this pair.
Finally, the upside potential in this pair is limited and recoveries are likely to be temporary if the pair continues to trade below the 130.60 peak.
The pair did an attempt to break lower from the price range that was located between 1.3420 and 1.3345. Prices traded to as low as 1.3302 level before to bounce back and stabilize which keeps the downside trend weak.
From a wider angle, we can say that the main trend is neutral in this pair, therefore, we can continue to witness sideways trading until we see an increase in trading volume.
From an intraday perspective, the nearest support stands at 1.3300 while the closest resistance is located at 1.3370.
Gold prices have stabilized in the short-term after reaching a strong resistance which stands near the 1950 level.
As mentioned in our previous report, the positive trend remains unchanged, and traders should look at declines as short-term corrections only which can offer entries at lower prices. Despite the slowdown in the bullish momentum, we can see that the uptrend is still strong.
In the meantime, any retracement is likely to fund buyers around the 1919-1911 support zone.
Looking at the near-term technical picture, 1935 level is seen as an important resistance followed by 1942 in extension, while the key support is located at $1919 per ounce.