EUR/USD rises back towards 1.0550 post-Sentix
The latest leg lower in EUR/USD lost legs near daily pivot at 1.0531, as the bulls jumped back on the bids following the release of upbeat Eurozone Sentix investors’ confidence numbers. Currently, the spot now advances 0.09% to 1.0541, heading back towards session tops posted previously at 1.0556. The main currency pair regained lost ground as the EUR bulls were offered some support from auspicious Sentix data from the Euroland, which arrived at 18.2 vs 12.5 expectations. Moreover, stalled buying seen around the greenback against its main peers, also helped the EUR/USD pair to stage a tepid-recovery in the European session, while negative European indices also underpinned the funding currency demand for the euro.Earlier on the day, the German industrial production and trade figured came in mixed, with the spot having paid little attention to the macro news. The immediate focus now remains on the Eurozone unemployment rate figures, while the US LMCI data and Fedspeaks will hog the limelight in the US session. In terms of technicals, the pair finds the immediate resistance 1.0563 (50-DMA). A break beyond the last, doors will open for a test of 1.0600 (round figure) and from there to 1.0654 (Dec 30 high). On the flip side, the immediate support is placed at 1.0510 (10-DMA) below which 1.0472 (20-DMA) and 1.0446 (Jan 2 low) could be tested.
GBP/USD rebounds after hitting over two-month low
The GBP/USD pair came under renewed selling pressure during mid-European session on Monday and dropped to the lowest level since Oct. 28. The pair, however, has managed to bounce off around 30-35 pips from session low and is currently trading around 1.2150-60 band. The pair remained under intense selling pressure for the second consecutive day after comments from K Prime Minister Theresa May, in an interview with Sky News, reinforced concerns of 'hard Brexit". The pair did attempt a tepid recovery back towards 1.2200 handle following the release of better-than-expected UK Halifax House Price Index (HPI). The recovery, however, turned short lived amid resurgent US Dollar buying interest also collaborated to the sharp slide to 11-week lows. Later during NY trading session, speeches from Fed’s Rosengren and Lockhart might influence investors’ expectations over the US central bank's interest rates outlook for 2017 and might provide fresh impetus for the major. A follow through selling pressure below multi-week lows support near 1.2125 region could accelerate the slide towards 1.2100-1.2080 region below which the pair is likely to turn vulnerable to head back towards multi-decade lows support near 1.2000 psychological mark, touched in early October. On the flip side, any recovery attempt might now confront resistance near 1.2200 handle, which is followed by resistance near 1.2225-30 region. A convincing move above 1.2225-30 resistance is likely to trigger a fresh bout of short-covering initially towards 1.2270 region, en-route 1.2300 handle.
USD/JPY trims gains, back around 117.00
After testing daily highs in the mid-117.00s, USD/JPY has scaled back those gains and returned to the 117.00 neighbourhood for the time being. The pair is holding on to the upper end of the recent range around the 117.00 handle, following a better tone in the greenback after Friday’s results from US Non-farm Payrolls. In the meantime, the pair seems to have found some decent support in the vicinity of the 115.00 mark, as seen by the strong rebound from last week’s lows, while the performance of US yields - particularly the 10-year benchmark continue to be the main driver behind the price action. Data wise today, the Fed’s Labor Market Conditions Index is next on tap ahead of speeches by Atlanta Fed Dennis Lockhart (centrist, non voter) and Chicago Fed Charles Evans (voter, dovish). Later in the week, US Retail Sales and advanced Consumer Sentiment will take centre stage along with expected Fedspeak. JPY remains under pressure on the positioning front as well, with speculative net shorts staying almost unchanged around 86K contracts on the week to January 3 and according to the latest CFTC report. As of writing the pair is retreating 0.05% at 116.96 facing the next support at 116.02 (low Dec.30) followed by 115.04 (low Jan.6) and finally 114.54 (23.6% Fibo of the November-December up move). On the other hand, a break above 117.53 (high Jan.9) would aim for 118.67 (high Dec.15) and then 121.70 (2016 high Jan.21).
USD/CHF rejected near 1.0200 handle, turns flat
Having posted a session peak at 1.0192 level, the USD/CHF pair erased all of its early gains and is now trading nearly unchanged from Friday's closing level, around 1.0170 region.The greenback witnessed a fresh wave of profit-taking after Friday's sharp up-move, with the key US Dollar Index reversing daily gains, hindered the pair's recovery move just below 1.0200 handle. Moreover, a mildly cautious sentiment surrounding European equity markets also seems to be driving safe-haven flows towards the Swiss Franc and collaborating to the pair's retracement from session peak. In absence of any major economic releases, market expectations of Fed rate-hike actions in 2017 would remain a key determinant of the pair's movement. Hence, investors now shift their focus on speeches from various Fed officials, including the Fed Chair Janet Yellen, which would provide fresh insight over the Fed's near-term monetary policy stance and eventually help determine the next leg of directional move for the major. On Monday, speeches from Fed's Rosengren and Lockhart might provide some impetus for short-term traders later during NY session. A follow through selling pressure below 1.0160 immediate support is likely to accelerate the slide further towards 1.0120-15 support area ahead of 1.0100 psychological mark. On the upside, 1.0200 handle remains immediate barrier, which if cleared decisively has the potential to lift the pair immediately towards 1.0230-35 resistance area en-route 1.0270-75 resistance.
Gold headed back to multi-week highs
After Friday's brief pause, Gold inched higher on Monday and remained closer to nearly five-week high touched last week. Currently trading around $1178 level, the precious metal snapped a three-day of winning streak on Friday as the latest reading on the US labor market revived hopes for a steeper Fed rate-hike cycle and weighed on the non-yielding metal. On Monday, however, retracing treasury bond yields and a cautious sentiment around equity markets pointed to the prevalent risk-off mood and extended support to the yellow metal's safe-haven appeal. Moreover, a mild US Dollar pull-back from session peak was further seen supporting the bid tone surrounding the metal. As we approach Donald Trump's inauguration day on January 20, uncertainty regarding the size and impact of the fiscal stimulus measures might continue to lend support and hence, any weakness might now be seen as a good value buy. "There is scope to trade higher to the 38.2 Fib level of 1187...If we break below 1170 there is scope to go back to the 23.6 fib @ 1162...""Daily charts look a bit overextended on the topside and therefore we are looking for the market to have possibly one more thrust higher to sniff this 1187 resistance and then fall....Now obviously if the market makes a break above 1193 then it will be given another boost and we should be able to trade to the 1199/1204 resistance..." "I would not be worried about longs unless we break 1162 and stay below ere...Then the recent short term uptrend could be over and Gold will continue lower and go back towards the 1146/42 support.."
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