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XAUUSD (1289.32): Gold failed to maintain the bullish momentum last week as price action reversed course just a few ticks shy of the 1300 round number resistance. As a result, the gold price settled lower at the 1280 level which we are closely watching. For the moment, the strong bullish reversal on Friday has established support at this level. Gold prices will now have to post a higher high to test the 1300 level. Failure to do so could keep price action subdued and expose the risk of the support level at 1280 giving way. This could open the price action to test the lower support at the 1250 handle.

AUDUSD (0.7134): The Australian Dollar managed to break past the breached support level at 0.7022 which did not offer much resistance. The rebound in price action saw the currency closing with strong gains. In the near term, following a modest dip, the upside momentum is likely to be maintained. The next main target for the AUDUSD comes in at 0.7191 level which has previously held up as resistance. As a result, the AUDUSD could soon settle into the range within 0.7191 and 0.7027. A further breakout from this range could establish the next leg in the direction of the trend. The recent declines coincided with the retest of the longer term trend line. As a result, we can conclude that support is likely to be firm at the 0.6936 level.

EURUSD (1.1423): The Euro currency was seen consolidating near the breakout of the trend line for the most part on Friday. Price action was seen establishing a temporary resistance level near 1.1405 level. As long as this level does not break, the EURUSD could be seen maintaining the pressure to the downside. There is temporary support formed near the previous local low at 1.1335 level. A break down below this level will see the EURUSD testing the next lower support at 1.1273 region.

The U.S. Dollar closed flat on Friday. The day was marked with some mixed economic reports and a speech by Fed Chair Jerome Powell which sent the equity markets briefly higher easing back the risk-averse sentiment in the market.

On the economic front, the Eurozone's final services PMI was seen to have declined to 51.2. This was below estimates of 51.4 according to the flash estimates. Services PMI was seen to have turned weaker across Germany and France as well.

Inflation estimates from the Eurozone also had some bad news as the headline inflation rose 1.6% which was slower than the expected forecasts of 1.8%. In November, consumer prices were seen at 2.0%. Core inflation data was seen to be stable at 1.0%.

In the NY trading session, Canada's unemployment data showed that the economy added 9.3k jobs which were higher than the estimates of a 6.8k increase. Canada's unemployment rate held steady at 5.6%, unchanged from the previous month.

The U.S. payrolls data, on the other hand, showed that the unemployment rate rose to 3.9%, up from 3.7%. Average hourly earnings were seen rising 0.4% on the month which was better than forecasts.

Looking ahead, the data today will cover the factory orders report from Germany. Economists forecast that factory orders will fall 0.2% on the month. Retail sales from Germany follows later which is forecast to rise 0.4% on the month.

The NY trading session is relatively quiet with only the ISM's non-manufacturing PMI report coming out. Economists expect the non-manufacturing PMI to slip to 59.6, down from 60.7 previously.

Daily Pivots: (S1) 136.51; (P) 137.41; (R1) 139.00; More...

Intraday bias in GBP/JPY remains mildly on the upside as rebound from 131.51 short term bottom is extending. Strong resistance should be seen at 139.88 key resistance to limit upside. On the downside, break of 135.66 minor support will turn bias to the downside for retesting 131.51 low. Overall, larger down trend from 155.59 is expected to resume later after the consolidation completes.

In the bigger picture, corrective medium term rise from 122.36 (2016 low) has completed at 156.69 already. That came after failing to break through 55 month EMA. Fall from 156.59 (2018 high) is seen as resuming the long term down trend from 195.86 (2015 high). Below 131.51 will target 122.36 low first. Break of 122.36 will target 116.83 low first (2011 low). And this will now remain the preferred case as long as 139.88 support turned resistance holds. Sustained break of 139.88 will mix up the outlook and we'll reassess on the final structure of the rebound from 131.51.

Daily Pivots: (S1) 122.83; (P) 123.35; (R1) 124.18; More....

Intraday bias in EUR/JPY remains mildly on the upside as rebound from 118.62 is extending. Strong resistance should be see around 124.61 key resistance to limit upside. On the downside, break of 121.80 minor support will turn bias back to the downside for retesting 118.62 low first. Overall, larger down trend is expected to resume later after the consolidation completes.

In the bigger picture, medium term rebound from 109.03 (2016 low) has completed at 137.49 already, with corrective structure. Fall from 137.39 is seen as a medium term fall, resuming the decline from 149.76 (2014 high). Such decline should break through 109.03 low next. This will remain the preferred case as long as 124.61 support turned resistance holds. Sustained break of 124.61 will mix up the outlook and we'll reassess on the final structure of the rebound from 118.62.

The European Single Currency was supported by the 200-hour simple moving average together with the monthly pivot point at the 1.1408 level during the morning hours of the second Monday of 2019.

The currency exchange pair continues recovering from the dramatic drop of 187 pips or 1.62% which hurt the rate during the first week of 2019. It seems that the rate will be trading sideways to stay at the 1.1420 level during the trading day.

However, the European single currency could break the resistance level of the 50.00% Fibo at the 1.1462 mark during today's US ISM Non-Manufacturing PMI data release at 15:00 GMT. Watch out for the news!

The British Pound recovered itself to trade at 1.2750 level during the morning hours on Monday.

The high volatility helped the rate to break the resistance level of the monthly pivot point to push the rate to trade towards the upper boundary of the dominant pattern line at the 1.2800 level. Most likely, the currency exchange rate will reach the dominant pattern line during the trading session on Monday.

Besides, none of the scheduled fundamental events will affect the British Pound during the day.

During the previous trading session on Friday, the US Dollar returned to trade at the previously drawn pattern. On Monday morning, the rate was trading between the 100-hour and the 55-hour simple moving averages at the 108.22 mark.

The resistance levels of the 100-hour simple moving average and the 38.20% Fibonacci retracement level should push the US Dollar to depreciate against the Japanese Yen to trade below the weekly pivot point at the 107.50 level.

On the other hand, the US Dollar could appreciate against the Japanese Yen during today's US ISM Non-Manufacturing PMI data release at 15:00 GMT to break the resistance levels to reach the 108.50 level during the trading session.

Daily Pivots: (S1) 0.8920; (P) 0.8975; (R1) 0.9006; More...

Intraday bias in EUR/GBP remains neutral for the moment. Also, further rally is expected with 0.8927 support intact. On the upside, firm break of 0.9098 resistance will extend the whole rise from 0.8655 to 0.9304 key resistance next. However, on the downside, break of 0.8927 support will suggest near term reversal and turn bias to the downside for 0.8810 support and below.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). It should be in medium term rising leg for 0.9304. Meanwhile, in case of another fall, downside should be contained by 0.8620/55 support zone to bring rebound.