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The Euro rises further in Asian/early European trading on Monday, lifted by renewed risk sentiment, which deflates the dollar, as markets expect that the Fed would further ease the pace of rate hikes in the next policy meeting.

The single currency rose almost 1.2% on Friday, after US labor report showed that US labor market is not as tight as initially estimated that adds to the notion of further easing of the pace of Fed policy tightening.

Friday’s bullish engulfing pattern underpinned recovery, with today’s rally through pivotal barrier at 1.0625 (converged 10/20DMA’s) further firmed the structure and signal that shallow 1.0713/1.0483 correction might be over.

Daily chart studies show 14-d momentum returned to positive territory and Stochastic/RSI are heading north that supports the action, which needs a clear break of pivotal Fibo barrier at 0.7046 (61.8% of 1.1494/0.9535) and a lower top of May 30 (1.0786) to signal continuation of a broader recovery from 0.9535 (2022 low of Sep 28).

Fresh bulls are expected to remain intact while near-term action stays above 1.0625 (converged 10/20DMA’s).

Res: 1.0711; 1.0736; 1.0746; 1.0786.
Sup: 1.0625; 1.0579; 1.0515; 1.0483.

The Australian dollar keeps strong bullish stance and hits five-month high in early Monday, in extension to Friday’s 1.8% advance.

Renewed risk appetite lifted Aussie, with fresh rally in stocks during the Asian session on Monday, adding to positive sentiment.

Traders also focus on Thursday’s release of US Dec inflation report, hoping that consumer prices will continue easing, as sharp increase in interest rates during last year starts to impact high inflation, with numbers at / below expectations to contribute to expectations for 25 basis points hike on Fed’s next meeting.

Such scenario would further deflate the US dollar and give fresh boost to Aussie’s recovery from 0.6170 (2022 low, posted on Oct 13).

Daily studies remain in full bullish setup, with additional positive signals seen from weekly close above 200DMA (0.6844).

Today’s break through 0.6915 (50% retracement of 0.7661/0.6170 descend) opens way towards psychological 0.70 barrier and 0.7076/91 (weekly cloud base / Fibo 61.8%).

Broken Fibo barrier reverted to initial support at 0.6915, followed by 0.6886 (Jan 4/6 tops) and 200DMA, which should contain extended dips and keep bulls in play.

Res: 0.6946; 0.7000; 0.7076; 0.7091.
Sup: 0.6915; 0.6886; 0.6841; 0.6798.

Gold bulls achieved another milestone last week, successfully retracing half of the March-September downtrend to stretch to a new five-month high of 1,879 on Monday.

Some caution could develop at this phase as the price is currently trading around a key constraining zone, which rejected the rally in 2011 and capped bullish actions several times over the past two years. Yet there are a couple of encouraging signals that could still secure buying positions and send the precious metal higher. Firstly, the bullish crosses between the simple moving averages (SMAs) are endorsing the clear positive trend in the short-term picture. Although close to overbought levels, the RSI and the stochastics have yet to show any convincing signs of weakness, while the MACD has resumed its positive momentum above its red signal line.

If the bulls claim the 1,878 bar and close above 1,900, the door will open for the 61.8% Fibonacci retracement of the 2,070–1,614 downtrend at 1,925. Running higher, the focus will immediately shift to the 1,980–2000 region, where upside pressures faded in April. Another victory here could easily prompt a rally towards the 2,070 record high.

Alternatively, a flip backwards could stall somewhere between the 50% Fibonacci level of 1,842 and the 20-day SMA at 1,816. If downside pressures dominate, the decline could next pause near the 200- and 50-day SMAs, which are currently converging around 1,775. A step lower is expected to press the price aggressively to the 23.6% Fibonacci zone of 1,722 and then to the 1,700 psychological mark.

All in all, gold has the foundation to boost its uptrend in the coming sessions, though some consolidation around the important resistance of 1,878 cannot be ruled out. 

EURUSD recorded a stunning rally last week, adding more than 2% so far and approaching the 1.0700 psychological mark, holding within the upward sloping channel. The technical indicators suggest that the market could be boosted a little bit more in the short term.

The RSI is currently increasing positive momentum above its neutral threshold of 50, while the MACD is gaining ground in the bullish area, remaining beneath its trigger line. Both are hinting that the next move in prices could be on the upside rather than on the downside.

An extension to the upside and above the 1.0740 resistance could meet a restrictive region between the 1.0800 round number and the 1.0900 handle, while even higher, steeper increases could also touch the 1.1180 barrier, registered in March 2022.

On the other hand, if the pair weakens, the 1.0520 barrier could provide immediate support ahead of the 1.0440 line. Even lower, the 50-day simple moving average (SMA) at 1.0407 could attract greater attention as any leg lower could worsen the market’s bearish outlook, opening the way towards the 200-day SMA near the 1.0290 support.

To summarize, EURUSD looks bullish in the short-and medium-term timeframes and only a close beneath the 200-day SMA may change this outlook.

The Aussie Dollar started a fresh increase above the 0.6780 resistance against the US Dollar. The AUD/USD pair gained pace above 0.6840 to move into a positive zone.

There was a move above a major bearish trend line with resistance near 0.6785 on the hourly chart. The pair is now consolidating above the 0.6900 support and the 50 hourly simple moving average. An immediate resistance on the upside is near the 0.6940 level.

If there is an upside break above the 0.6940 zone, the pair could rise steadily towards the 0.6980 level in the near term. The main resistance now sits near 0.7000 on FXOpen.

An immediate support is near the 0.6910 level. The next key support is near the 0.6850 level. A downside break below the 0.6850 support could lead the pair towards the 0.6800 support.

The Dow Jones 30 bounces as mixed US job data may temper the Fed’s hawkishness. The swings between 32500 and 33500 along the 30-day moving average showed a temporary equilibrium between supply and demand. A bullish breakout means that the recovery bias is still intact and 32900 is now the immediate support. 34350 at the origin of the mid-December trough is an important resistance. The bulls would have the last laugh if they succeed in pushing past it, resuming the rally from last October.

The Canadian dollar surged after its labour market’s strong performance in December. Renewed selling pressure has driven the pair below the swing low at 1.3470 from the start of the year, which suggests a lack of support. The daily level and December’s low of 1.3390 is a critical floor and its breach could lead to a bearish reversal below 1.3300. As the RSI inches to the oversold area, the demand zone may trigger a ‘buy-the-dips’ behaviour. 1.3560 would be the first hurdle should the greenback manage to bounce back.

The US dollar tanked after wage growth was slower than expected in December. The pair previously came under pressure near last June’s highs around 1.0750. A double top at 1.0710 capped the euro’s advance and led to a correction. A three-leg sell-off below 1.0520 prompted some buyers to bail out but strong support has been observed in the demand zone 1.0450-1.0480. A bounce above 1.0630 may help the bulls regain confidence, making 1.0600 a fresh support. A close above 1.0710 would extend the rally towards 1.0800.

Daily Pivots: (S1) 159.03; (P) 159.52; (R1) 160.33; More...

Intraday bias in GBP/JPY remains neutral for the moment. On the downside, break of 155.33 will resume the fall from 172.11 to 153.70 fibonacci level. Nevertheless, considering bullish convergence condition in 4 hour MACD, firm break of 162.32 will argue that such decline has completed, and turn bias back to the upside for 55 day EMA (now at 163.45) and above.

In the bigger picture, as long as 153.02 support turned resistance holds, decline from 172.11 medium term top is expected to continue to 38.2% retracement of 123.94 to 172.11 at 153.70. Sustained break there will raise the change of trend reversal and target 61.8% retracement at 142.34. Nevertheless, break of 153.02 support turned resistance will argue that the decline has completed, and retain medium term bullishness.

Daily Pivots: (S1) 140.11; (P) 140.78; (R1) 141.32; More....

Intraday bias in EUR/JPY remains neutral for the moment. On the downside, break of 137.37 will resume the decline from 148.38 to 135.40 fibonacci level. However, considering bullish convergence condition in 4 hour MACD, break of 142.92 will argue that the correction from 148.38 might have completed. Intraday bias will be turned back to the upside for 146.71 resistance.

In the bigger picture, as long as 55 week EMA (now at 138.64) holds, larger up trend from 114.42 (2020 low) is still in progress for 149.76 long term resistance. However, firm break of 55 week EMA will bring deeper fall to 38.2% retracement of 114.42 to 148.38 at 135.40. Sustained break there will raise the chance of trend reversal, and target 61.8% retracement at 127.39.