Euro Gaps Higher Testing December Highs
The euro currency gapped higher on the open on Monday as traders returned from the year-end holiday.
The US dollar resumed its declines from 2020 pushing currencies such as the euro higher. The common currency briefly rose to test the Dec 30, 31 highs before pulling back.
If price action continues on the pullback, we could see a near term decline. This would potentially make way for a triple top pattern as well.
A break down below January 1 lows of 1.2121 could validate the bearish pattern. For the moment, the EURUSD is likely to trade within the highs and lows of 1.2312 and 1.2121 respectively.
Sterling Falls On Risk Of Lockdown Measures
The British pound sterling is posting steep losses on Monday.
The declines come amid threats of new tougher lockdown measures in the United Kingdom. The one day implied volatility is once again pushing higher.
After trading near the highs, Monday’s bearish close could confirm the downside. This would potentially open the way for the GBPUSD to test the 1.3500 level of support.
As long as this support holds, it remains within the long term uptrend. However, the GBPUSD will need to post higher highs to confirm this.
Failure near the 1.3500 could open the way for the GBPUSD to extend declines lower to the 1.300 level.
WTI Crude Oil Pulls Back From Multi-Month Highs
Oil prices rose to multi-month highs on Monday in anticipation of the OPEC+ meeting. Furthermore, tensions in the Middle East also added to the bullish fundamentals.
Prices rose to highs of 48.97 before giving back the gains. For the moment, oil prices remain consolidated near the current levels between 46 and 49.
The uptrend since early November remains intact for the moment. Only a strong close and a lower high around the 46.00 level will confirm otherwise.
For the moment, oil prices will need to establish support near the 48.00 level to continue pushing higher.
Gold Rises To An Eight-Week High
Gold prices popped higher as the US dollar continued to extend declines. The pace of gains in the precious metal was however bigger, rising almost 2% intraday.
The gains come amid a mixed set of narratives, including the Georgia senate runoff election.
Price action has finally emerged from the consolidation from which there has been an ascending triangle pattern.
The current gains put gold prices within reach of the 1950 level next. A strong close above this level is required to confirm further upside.
To the downside, we expect prices to retest the 1900 – 1911 level in the short term to establish support.
