USD rebounds as economic data shows optimism
|Euro Pulls Back From Two Year Highs
The euro currency broke the support level near 1.1750 on Monday. This came after last Friday saw price action testing this area.
The strong close below this level could see possible declines further. But for the moment, there is scope for price to retest this level.
If resistance forms near 1.1750 then we expect to see a continuation lower. The next main trend line is, however, likely to act as support in the near term.
But we see a possible decline to 1.1600 level of support which is the next key target for EURUSD.
For the moment, the Stochastics is well oversold, which could signal a possible bounce to the upside.
Sterling Loses The 1.3100 Handle
The pound sterling is trading weaker on Monday. This comes just after on Friday last, GBPUSD rose above the 1.3122 level.
A strong bearish candlestick on an intraday basis saw prices pulling back lower. However, we see a reversal taking place, just above the major trend line.
We could expect prices to pullback to this trend line in the near term. As long as prices are steady above the rising trend line, GBPUSD will be retesting the 1.3122 level once again.
If price action fails to breakout above this level, then we might get to see a possible correction lower.
The next main support area is around the 1.2813 level.
WTI Crude Oil Drops Below 40 And Rebounds
Oil prices are trading somewhat volatile over the past two sessions. The commodity is up over 1.25% on an intraday basis.
The gains come as WTI crude oil is testing the 41.00 level once again. Given that this price level held up as floor, a retest back to this region could see resistance forming.
If oil prices fail to breakout above 41.00 then we might get to see a move lower.
For now, the key swing point near 39.75 will be critical. If oil prices slip below this level then we could see a move toward the 37.50 – 38.00 level eventually.
Gold Prices Pause After Setting Record Highs
The precious metal is trading on a softer note on Monday.
Robust economic data has sparked optimism in the Eurozone economy.
After rising to highs of 1984.86, price action is trading a few points lower.
While the trend line is breached, it is still too early to confirm if price will continue to push lower.
For now, a soft support area is near the 1950 handle. A break down below this level might, however, suggest a sharper correction to come.
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