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The strong upside momentum that drove Gold on Friday morning reversed south near the 1,338.00 mark. This move was followed by a period of decline. The yellow metal was stranded between the 55– and 100-hour SMAs for the most part; however, a strong hourly fall breached the former and left the rate testing the 200-hour SMA and the monthly R1 by the time of this analysis. In terms of fundamentals, this support area is expected to hold unless a positive outcome regarding the US government shutdown results in a notably stronger US Dollar. On the other hand, the northern side is guarded by the 100-hour SMA and the weekly PP circa 1,334.00. It is likely that the pair remains stranded between the aforementioned barriers until a breakout determines the pair’s further direction.

The British Pound fluctuated against the US Dollar after the UK retail sales report, falling initially by 4 base points to the 1.3916 mark. The GBP/USD exchange rate briefly touched the 1.3945 level remaining in the bearish trend.

Britain's shop sales depreciated by more than anticipated in December, confirming the weakest yearly growth in retail in four years, as consumer spending remained limited due to Brexit-hit prices. The Office for National Statistics revealed that the volume of retail sales fell 1.5% from November, reversing a 1.0% increase registered in the prior month. Meanwhile, the Bank of England anticipated the squeeze on consumers to ease this year, as inflation calms down and pay growth accelerates.

Cable bounced to 1.3900 are in European trading after easing to 1.3857 in Asia, following gap-higher opening on Monday. Overall bulls remain intact despite repeated strong rejections at 1.3942 and conflicting technical/political factors and keep focus shifted higher. Bulls need sustained break above 1.3945 to open way for eventual test of psychological 1.40 barrier and further extension of recovery leg from post-Brexit low at 1.1930. The pair is currently riding on the wave of five-wave sequence from 1.3075 (Oct/Nov higher base) which could travel to its Fibonacci expansion 138.2% at 1.4034 and FE 161.8% at 1.4123, in extension. Thick hourly cloud (spanned between 1.3891 and 1.3849) marks solid support, guarding rising 10SMA (1.3737) which is expected to contain extended dips and keep bulls intact.

Res: 1.3911, 1.3945, 1.4000, 1.4034
Sup: 1.3891, 1.3849, 1.3804, 1.3756

NZDUSD (0.7274): The NZDUSD continues to maintain its hold near the 4-month high. However, failure to post any higher highs at this level indicates that the currency pair could be looking to post a correction. On the 4-hour chart, immediate support is seen near the current higher lows at 0.7283. A break down below this level is required in order for NZDUSD to confirm the downside correction. The kiwi could be targeting 0.7160 followed by an eventual move towards testing the support at 0.7000 level.

USDJPY (110.76): The USDJPY continues to hover around the 110.70 level of support. The strong bullish close last week near this level and the short term dip indicates a temporary base being formed. On the 4-hour chart, minor resistance is seen at 111.00 - 110.88 region. USDJPY will need to close above this level in order to target 111.61 resistance level. To the downside, if the resistance holds the gains, we could expect USDJPY to move back into its previous range. A break below the previous lower support at 110.40 will be key but this level could hold the declines in the short term.

EURUSD (1.2223): The EURUSD is seen consolidating near the 4-year highs as Friday's attempts to recover failed. Price action as seen on the 4-hour chart shows the EURUSD seeking dynamic support off the median line. We expect a short term rebound off this level as EURUSD could remain range bound heading into Thursday's ECB meeting. The upside gains are called near the current highs of 1.2282 level. Further gains can be expected only on a convincing close above this level. To the downside, the support at 1.2184 remains in focus and this could form the short term range for the EURUSD.

The U.S. dollar was seen closing with some gains on Friday, in the hope that Washington would pass the spending bill. Although it was cleared by the U.S. House, the bill stalled in the U.S. Senate. Late night talks over the weekend did not yield many results and lawmakers are expected to reach some agreement today.

The Euro was seen attempting to recover the losses on Friday but after rising to an intraday high of 1.2294, the currency pair gave up the gains and settled lower to close at 1.2223.

Looking ahead, the economic calendar is light today. The Eurogroup meetings are scheduled throughout the day while in the NY trading session, Canada will be releasing its wholesale sales data. Economists forecast an increase of 1.0% for the month.

The NZD/USD consolidation has just broken above the retracement trend line and D H3 camarilla level at 0.7288. The pair has been in a steady uptrend since December 2017, and 0.7305 could be the next target. Breakout of 0.7305 or 4h close above it and the famous "kiwi" could go to 0.7330-50. As long as it stays above 0.7240, the intraday trend is bullish.

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The British pound has started to turn lower against the U.S dollar, as the U.S dollar index start to recover from three-year trading-lows. The GBPUSD pair is currently trading around the 1.3860 level, with intraday sellers largely in control while price-action holds below the key 1.3880 level. With a lack of high-impacting macro-economic data from the United Kingdom on Monday, sterling traders are likely to focus on negotiations centering around the current United States government shutdown.

The GBPUSD pair remains intraday bearish while trading below the 1.3880 level, key downside targets for the pair are 1.3810 and 1.3720.

Should price-action on the GBPUSD pair start to trade above the 1.3880 level, attention may shift back toward the 1.3944 and 1.4000 resistance levels.

The U.S dollar is trying to recover upside buying momentum against the Japanese yen currency, as the U.S dollar index starts to recover from depressed levels. Price-action is currently trading above the key 110.80 level, after the USDJPY pair found strong technical support around the 110.50 level on Friday. Traders are likely to remain increasingly cautious ahead of BOJ’s interest rate decision and policy statement on Tuesday, as speculation surrounding the reduction of the Central Banks QE stimulus programme mounts.

USDJPY intraday buyers retain control of the pair while price trades above the 110.80 level, further upside towards the 111.22 and 111.48 levels seems possible.

Should the USDJPY pair start to move below the 110.80 level, a sell-off towards 110.50 and 110.33 remains possible.