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During Friday's trading session, the currency exchange rate was supported by the 55-hour simple moving average to end the trading session at the 113.83 mark. On Monday morning, the US Dollar kept surging upwards to trade at the 114.13 mark.

In regards to the near-term future, most likely, the US Dollar will meet the weekly R1 at the 114.30 mark during the trading session on Monday. The 55-hour simple moving average should support the surge during the day.

On the other hand, the yellow metal could move sideways to stay at the 114.00 level during the trading session.

During Friday's trading session, the yellow metal slumped against the US Dollar passing through the support of the monthly pivot point at 1213.84 level to end the trading session at the 1,210.66 mark. On Monday morning, the gold passed through the support of the 50.00% Fibonacci retracement level to trade at 1207.26.

In regards to the near-term future, the gold will move sideways to trade below the 50.00% Fibonacci retracement level during the day. Most likely, the lack of fundamental news should not break the predictions for the gold on Monday.

On the other hand, the yellow metal could break the resistance of the 50.00Fibo at 1207.49 to surge towards the monthly pivot point at the 1213.84 mark.

The British Pound has lost about 4.61% of its values against the Australian Dollar since the beginning of October. This decline began after the currency pair reversed from a high mark of 1.8734 on October 10.

A one-month descending channel pattern has been guiding the exchange rate lower towards the lower boundary of a dominant descending channel at 1.7600.

Everything being equal, it is likely that the GBP/AUD currency exchange rate maintains the descending channel pattern during the following trading sessions.

The potential target for the pair will be at the bottom border of the dominant ascending channel in the coming days.

The Pound Sterling has been appreciating against the Canadian Dollar since the end of October after the pair bounced off its bottom border of an ascending channel at 1.6650. However, this appreciating was halt by a resistance level formed by the upper boundary of a dominant descending channel at 1.7250.

A breakout through the lower boundary of a three-week descending channel occurred this morning.

Given that a breakout has occurred, the currency exchange rate is likely to continue its decline during the following trading sessions. The potential target for bearish traders will be at a price base of 1.6800.

The American dollar has been showing growth during the last four weeks, managing to return to the annual highs area. After all, it had closed the Friday session at the highest level in 16 months. Despite the drawdown at the beginning of the week, caused by the traditional pressure on the currency due to pre-election uncertainty, the dollar quickly shake off these fears and has began to rise. Now USD is fully able to continue this trend because of several reasons.

On the one hand is the hawkish Fed rhetoric that was demonstrated after the last week meeting. The committee did not reflect on the October stock market’ problems and on the growing signs of the global economy slowdown. This fact had increased the contrast in debt markets’ interest rates due to a growth in dollar short-term interest rates.

On the other hand, after the rebound from the end of October, the stock markets of developing countries (especially Asia) had come under pressure again. Moreover, by the end of last week, the positive momentum of growth in US stocks had dried up. And now this trend development is increasing the demand for the dollar as a defensive asset, forming a moderate outflow from other regions.

Asian indices had lost 2/3 of the rebound since the end of October, reflecting the return to the markets’ focus the developing countries’ development. The recent lows retesting could become a trigger for a new serious wave of demand for the dollar as a defensive asset.

At the new week a number of important data from the United States will be published: these are able to support the american currency. Consumer prices and retail sales are expected to show healthy growth, and the subsequent speech by Fed Chairman Powell is expected to shed light on the Fed’s position.

In addition to statistical data, traders will pay attention to the USD behavior near the local maxima. Growth above the previous peaks at 97 on the Dollar Index is able to open the way to the subsequent rally up to 102 (the multi-year highs since 2017).

ECB Vice President Luis de Guindos warned in a speech today that while the fundamentals for solid growth rates over the next two years are still in place, some risks are building up in the financial system. The first one is that current US expansion is "now significantly longer than historical norms". A down turn in the US "could trigger a reassessment of riskier asset classes."

Secondly, "tensions have grown in emerging market economies: due to strong US Dollar and increased trade frictions. Such developments may "undermine global growth prospects and ultimately lead to abrupt increases in risk premia".

Thirdly, there were "re-emerging debt sustainability concerns" in Europe, both in public and private sector. And, "Italy is the most prominent case at the moment". Meanwhile, "strong market reactions to political events have triggered renewed concerns about the sovereign-bank nexus in parts of Europe" But contagion has been "limited" so far.

De Guidndo's full speech "Coming to the forefront: the rising role of the investment fund sector for financial stability in the euro area".

The USD keeps strengthening against the basket of world currencies. The USD index (#DX) has updated the annual maximums and went over 97. The demand for the USD is kept by the prospects of increasing the key interest rate. At the moment, more than 75% of the market participants are sure that it will happen in December. Additional support is provided by the positive economic reports. October's Producer Price Index reached +0.6%, which is above the expectations of +0.2%.

EUR and GBP are still under pressure due to the conflicts regarding the budget of Italy and the Brexit conundrum. The investors are waiting for the new information regarding the US and China trading conflict. The key events this week are the statement by the Head of the Federal Reserve and a series of economic reports from the US.

The quotes on oil are recovering after a long fall. Currently, the WTI futures are trading at $61.15.

Market Indicators

This Friday the US stock market was showing a bearish sentiment: #SPY (-0,98%), #DIA (-0,77%), #QQQ (-1,69%).

The 10-year US government bonds yield is 3.18-3.19%.

USDCAD remains in an uptrend after another bounce from the trendline support connected from 1.2780 which may cause an acceleration higher this week as pair can be breaking up into wave three. If that's the case then rise will continue this week towards 1.3300/1.3360 area. Any surprise to the downside and back below rising trendline will need an update on our count.

USDCAD, 4h

The Australian dollar extends weakness into third straight day and hit new one-week low on Monday.

Probe below pivotal support at 0.7195 (Fibo 38.2% of 0.7020/0.7302) reinforced by rising 10SMA, could generate fresh bearish signal on daily close below.

Stronger greenback, weak Asian and fresh fall of European stocks after positive start on Monday, add to negative outlook, as Aussie was also hurt by reduced risk appetite.

Weaker momentum on daily chart supports near-term bears which pressure next strong support at 0.7178 (base of thickening falling daily cloud), loss of which could further weaken the structure and risk extension towards 0.7145 (rising 20SMA) and 0.7128 (Fibo 61.8% of 0.7020/0.7302 / 30SMA).

Broken 5SMA marks solid resistance at 0.7239, which guards upper pivot at 0.7259 (falling 100SMA).

Res: 0.7218, 0.7239, 0.7259, 0.7300
Sup: 0.7178, 0.7161, 0.7145, 0.7128

BoE Deputy Governor Ben Broadbent reiterated in a CNBC interview that the central bank's forecasts were "conditioned on an assumption that there will be a deal" on Brexit. In particular, there would be a "transition period agreed". And to him, a Brexit deal is still "the most likely outcome". However, he also emphasized that "the sequence of events over the next two to three months could change the outlook materially,"

On recent volatility in Pound exchange rate he noted "obviously, over time, every day there are headlines, positive, negative, which will send the currency in particular in one direction or the other."

On the economy, He said that "even though GDP (gross domestic product) growth has been weaker than certainly pre-crisis rates, it's been strong enough to allow the unemployment rate to fall further to reach 40-year lows and that in turn has been strong enough to push our wage growth which is momentarily higher since any time since the crisis,"

He added that "we've certainly seen stronger figures, not just in the official data but in many of the pay surveys, than we've seen for many years." And, the MPC "always believed that the same old rules applied — that as the labor market tightened you would begin to see faster wage growth, and that's indeed what we've seen."

While Broadbent was still optimistic on Brexit deal, the developments from the weekend were negative. Prime Minister Theresa May has called off an special cabinet meeting on Brexit today, due to objections to her plan from within the party. Fresh selling is seen in the Pound on news that the extra EU summit is now ruled out as there won't be enough progress to make it meaningful.