Can Gold Breakout To The Upside?

The precious metal made solid gains on Monday, rising close to 3% intraday.

The gains came as the Fed announced its open-ended asset purchases.

Technically, the rebound is, however, met with a hidden bearish divergence.

This means that price action could give back the gains rather quickly.

On the contrary, if XAUUSD forms a base near 1534, we expect further gains to come thereafter.

WTI Crude Oil Settles Back Near $22

Crude oil prices are modestly weaker, down over 5% on the day.

This comes as price action is back to testing the support level of 22.00.

Given that this is a key price level, a break down lower could trigger further losses.

However, oil price action is looking to be at a critical point. The bias remains a bit mixed at this point.

Sterling Gives Back Gains From Previous Sessions

The British pound is trading weaker once again, down over 1.5% intraday.

The declines erase the modest gains from late last week. As price action tests the support area of 1.1477, this level is now at risk.

A break down below this support region could see the GBPUSD falling to fresh lows.

However, watch the Stochastics on the 4-hour chart which could suggest a possible larger correction in the making.

Euro Moves Into A Tight Range

The euro has stabilized as price action remains within the confines of 1.0787 and 1.0663.

With the possibility of a double bottom in place near 1.0663, the bias is looking to the upside.

However, unless the range is breached, we do not expect to see much movement.

On the contrary, this could expose the downside risks near 1.0663.