The latest statistics from Japan showed that the country's gross domestic product fell 6.3% on an annualized basis in Q4.
Data from Japan's Cabinet Office fell shy of the estimates of 3.8%. This comes after GDP grew by 0.5% in the third quarter of the year.
On a seasonally adjusted basis, the GDP was down 1.6%, falling more than expectations.
Euro Trades Flat as US Markets Closed
The US markets were closed on account of the President's day bank holiday.
However, the euro did not see much movement. Price action remains muted with economic data from the eurozone also staying sparse.
EUR/USD Consolidating Near Support
The common currency is consolidating near the support area of 1.0837 level. If this consolidation continues, a break of the trend line will confirm a possible correction.
However, the gains will be limited to the resistance level of 1.0897. In the event of a breakdown below 1.0837, further declines could occur.
UK & EU Plan to Face Off on Brexit Talks
The UK and the EU are planning to begin talks on the withdrawal from the EU. However, the French foreign minister warned Britain that the UK will face a tough uphill challenge and that Brussels will defend its interests.
The formal talks are set to start next month.
GBP/USD Pulls Back After Modest Gains
The pound sterling is pulling back after failing to post new highs. Price action is stalling near the previous pivot highs of 1.3067. There is scope for a decline back to the support area at 1.2960. However, a higher low formation above this support could indicate a potential inverse head and shoulders pattern.
Gold Holds Gains Amid a Quiet Trading Day
The precious metal made some modest gains on Monday. This came despite a lack of any economic data. The market sentiment overall remains cautious due to the coronavirus outbreak.
With Japan's GDP contracting in the fourth quarter, there are fears that the economy will not recover in the first three months of the year.
XAU/USD Could Continue the Bullish Trend
Following the strong recovery from last week, the precious metal is taking a breather. While price action nears the previous highs, there is scope for gold to reach new highs.
This comes amid a bullish flag pattern emerging near the current highs. The upside target is at 1600, followed by 1640.
This market forecast is for general information only. It is not an investment advice or a solution to buy or sell securities.
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