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Sterling was the talk of the town across currency markets for all the wrong reasons during Monday's trading session, thanks to mounting political uncertainty in the United Kingdom.

The Sunday Times newspaper reported over the weekend, that as many as 40 Conservative MPs have agreed to sign a letter of no-confidence in Theresa May. Although this was eight short of the signatures needed to trigger a formal leadership challenge, this is likely to add to the bucket load of uncertainty, translating into more pain for the British Pound. With political instability at home stimulating concerns over May's ability to govern and deliver Brexit, Sterling may have a very rough and rocky road ahead. The price action suggests that sentiment towards the Pound remains bearish, despite November's rate hike. Further downside is likely to be on the cards, on the back of political jitters and Brexit risk.

Taking a look at the technical picture, the GBPUSD has stumbled into the trading week under noticeable selling pressure, with bears eyeing 1.3050. Technical lagging indicators such as the MACD and 50 Simple Moving Average, both point to further downside. A decisive break down below 1.3050 may encourage a further decline towards 1.3000 and 1.2960, respectively.

Dollar hovering around 94.50

The Dollar appreciated slightly against a basket of currencies on Monday, as investors continued to ponder over the fate of the proposed U.S tax reforms.

With the Greenback becoming increasingly sensitive to expectations of proposed U.S. tax reforms, any positive, or negative, news on these developments has the ability to spark volatility. Focusing on the technical picture, the Dollar Index is under some selling pressure on the daily charts. Sustained weakness below 94.40 may encourage a further decline lower towards 94.00. In an alternative scenario, a breakout back above 94.70 may trigger an incline towards the 95.10 resistance.

Commodity spotlight - Gold

A firmer Dollar, coupled with expectations of a rate hike by the Federal Reserve in December, may have slightly obstructed Gold's recovery during Monday's trading session, with prices trading below $1280 as of writing.

This yellow metal remains a battleground for bulls and bears and as such, is likely to translate into prices trading in a wide range. While bulls may find support from political risk and geopolitical tensions, bears are poised to be inspired by expectations of higher U.S. interest rates and a stabilizing Dollar. With the economic calendar fairly light today, price action may dictate where the yellow metal trades. From a technical standpoint, previous support around $1280 has the ability to transform into a dynamic resistance that triggers a decline back towards $1267. Alternatively, a breakout above $1280 could open a path towards $1289 and $1300, respectively.

Good day traders! Hope you had a Great weekend and are now ready for the new one. Let's start the day with Crude oil.

Crude oil is trading around the highs and to be specific near the Fibonacci ratio of 200.0% that is already acting as resistance so we see market moving sideways now, ideally making a wave 4 that may find a base this week around $56.00. There is also an upper line of an trading channel that can act as a support. We think that sooner or later crude oil can be back at the highs, at 59/60 levels.

Crude Oil, 4H

Now switching to DAX.

DAX made a sharp reversal lower away from the 13537 region, which is a suggestion of a top in place. A five-wave drop and a break below the lower channel line would confirm a completed bullish impulse and a minimum three-wave bearish reversal to be in play, probably towards the 12904 region.

German DAX, 4H

USDJPY: The pair remains weak and vulnerable to the downside with eyes on its key support located at 112.95 area. On the downside, support comes in at the 113.00 level where a break if seen will aim at the 112.50 level. A cut through here will turn focus to the 112.00 level and possibly lower towards the 114.00 level. On the upside, resistance resides at the 114.00 level. Further out, we envisage a possible move towards the 114.50 level. Further out, resistance resides at the 115.00 level with a turn above here aiming at the 115.50 level. On the whole, USDJPY faces further pullback threats.

The U.S dollar remains under selling pressure against the Japanese Yen, after two strong technical price rejections from the 113.68 level. The USDJPY pair currently trades around the 113.30 level, as the U.S dollar index continues to drive intraday trading sentiment. The macro-economic calendar remains light today, with the absence of data in the U.S session, traders will look to Federal Reserve speakers and the next directional move in the U.S dollar index.

The USDJPY pair remains intraday bearish while trading below the 113.68 level. Further downside losses towards the 112.89 and 112.28 levels appears likely.

Should the USDJPY pair hold price-action above the 113.68 level for an extended period, further upside towards the 114.04 and 114.50 levels seems possible.

The British pound continues to retreat against the U.S dollar, hitting 1.3062, during today's European trading session. Political uncertainty surrounding British PM Theresa May's tenure as leader of the UK Conservative, has seen the GBPUSD pair lose close to three-quarters of one percent. Price-action currently trades around the 1.3090 level, as the GBPUSD pair stages a minor recovery from the price-lows of the day, ahead of the U.S opening bell.

The GBPUSD pair remains strongly bearish while trading below the 1.3109 technical losses. Further losses towards the 1.3058 and 1.3036 levels appear likely.

Should GBPUSD price-action move above the 1.3109 again level, buyers will likely re-test the 1.3130 and 1.3168 technical levels.

The DAX continues to head lower in the Monday session. Currently, the DAX is at 13,018.50, down 0.81% on the day. On the release front, there are no German or eurozone events on the schedule. Germany and the eurozone release GDP reports, and Germany will publish ZEW Economic Sentiment. As well, Mario Draghi and Janet Yellen will participate in a panel at an event organized by the ECB.

It was a rough week for the DAX, as the index declined 2.5 percent. Negative corporate earnings from major European companies weighed on German stock markets throughout the week, and the DAX continues to lose ground on Monday. Still, the index continues to trade at high levels, and could rebound if US President Trump's tax proposal gets through Congress. Trump wants the tax bill on his desk before the end of the year, but that will be a tall order, as some Republicans lawmakers are not happy with the proposal and could vote against it.

ECB policymakers have been reluctant to alter their stimulus program (QE), but they finally pressed the trigger in October, with a "less but longer" setup. Starting in January, the ECB will cut its monthly asset purchases from EUR 60 billion to 30 billion. However, QE is being extended until September 2018, as the Bank is weaning the eurozone off stimulus. With the eurozone economy exceeding expectations in 2017, some policymakers have expressed reservations about the gradual pace of trimming stimulus, arguing that the Bank should cut the asset purchases at a faster rate. Governing Council member Philip Lane, head of the Irish central bank, said last week that if inflation moves closer to 2 percent, the ECB should tighten at a faster pace. The heads of the German and Austrian central banks, who are also on the Governing Council, went even further, saying that the ECB should have indicated a clear intent to end asset purchases, rather than announce an extension. If eurozone indicators continue to point upwards, ECB President Mario Draghi will be under pressure to terminate QE before September, or lower the size of the asset purchases.

It's report card time on Tuesday, as Germany and the eurozone release GDP reports for the third quarter. Both releases are forecast to show respectable gain of 0.6% percent. The German economy has looked sharp in 2017, buoyed by solid consumer demand and a strong global appetite for German products. Germany has been the locomotive for the euorozone, and boosted traditional laggards such as France and Spain. Geopolitical concerns such as Catalonia and Brexit have the potential to crash the party, but in the meantime, eurozone indicators have generally been pointing upwards.

The CAC index has started the week with losses. Currently, the CAC is trading at 5,339.30, down 0.73% on the day. On the release front, there are no French or eurozone indicators on the schedule. On Tuesday, the eurozone releases Flash GDP, and ECB President Mario Draghi will participate in a panel at an event organized by the ECB. Later in the week, we'll get a look at French and eurozone inflation, with the release of CPI reports.

It has been a healthy 2017 for the eurozone, which releases Flash GDP on the third quarter. The markets are expecting a repeat of the 0.6% gain in the second quarter. France's economy has also rebounded, and GDP has grown by 0.5% for three consecutive quarters. The OECD is predicting that the French economy will expand 1.7%, up from its previous forecast of 1.3%.

The CAC suffered its worst week since August, as the index declined 2.3 percent. The primary factor in the slide was negative corporate earnings from major European companies. The CAC has posted four straight losing sessions, and finds itself lower on Monday as well, with almost all listings in red territory. Currently, the CAC is at its lowest level since mid-October. At the same time, the CAC posted strong gains in October, and could rebound if US President Trump's tax proposal is able to pass through Congress. Trump wants the tax bill on his desk before the end of the year, but that will be a tall order, as some Republicans lawmakers are not happy with the proposal and could vote against it.

Daily Pivots: (S1) 149.01; (P) 149.50; (R1) 150.17; More

GBP/JPY's break of 148.42 suggests that fall from 151.92 has resumed. Such decline is seen as the third leg of the corrective pattern from 152.82. Intraday bias is back on the downside for 146.92 support and below But we'd expect strong support from 61.8% retracement of 139.29 to 152.82 at 144.45 to contain downside and bring rebound. On the upside, break of 149.98 resistance will turn bias back to the upside for 151.92/152.82 resistance zone instead.

In the bigger picture, medium term rebound from 122.36 is still expected to resume after corrective pull back from 152.82 completes. Firm break of 38.2% retracement of 196.85 to 122.36 at 150.43 will carry long term bullish implications. In that case, GBP/JPY could target 61.8% retracement at 167.78. However, break of 139.29 will indicate rejection from 150.43 key fibonacci level. And the three wave corrective structure of rebound from 122.36 will argue that larger down trend is resuming for a new low below 122.26.

Daily Pivots: (S1) 113.28; (P) 113.45; (R1) 113.69; More...

USD/JPY continues to stay in range above 112.95 and intraday bias remains neutral at this point. As long as 112.95 support holds, near term outlook remains bullish and further rise is expected. On the upside, sustained break of 114.49 key resistance will pave the way to retest 118.65 high. However, break of 112.95 support will now indicate rejection from 114.49 and turn bias to the downside for 111.64 support and below.

In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming.

Daily Pivots: (S1) 0.9929; (P) 0.9949; (R1) 0.9974; More....

USD/CHF is still staying in consolidation from 1.0037 and intraday bias remains neutral first. We'd continue to expect downside to be contained above 0.9835 resistance turned support and bring rally resumption. On the upside break of 1.0037 will resume whole rally from 0.9420. And with sustained trading above 61.8% retracement of 1.0342 to 0.9420 at 0.9990, USD/CHF should then target a test on 1.0342 key resistance.

In the bigger picture, current development suggests that USD/CHF has defended 0.9443 (2016 low) key support level again. Rise from 0.9420 could is a medium term up move and should target a test on 1.0342 high. This represents the upper end of a long term range that started back in 2015. On the downside, break of 0.9736 support is now needed to indicate completion of the rise from 0.9420. Otherwise, further rally will remain in favor in medium term.