Euro Resumes Slide, After A Two-Day Gain
The euro currency is trading weaker on Monday following two daily sessions of gains previously. Price action remains confined below the 1.2144 level of resistance.
Given the current pace of declines, the EURUSD currency pair is likely to test the 1.2050 level of support more firmly.
We expect the support level near 1.2050 to hold up for the moment. As a result, the EURUSD could maintain a sideways range within 1.2144 and 1.2050 levels.
The stochastics oscillator is currently moving closer to the oversold levels. Therefore, we could expect to see prices rebounding off the 1.2050 handle.
In the unlikely event that the EURUSD loses the 1.2050 support, we could expect to see a larger correction down to 1.1900.
GBPUSD Testing The Lower Trend-Line
The British pound sterling is also on track to post declines following a period of consolidation since last week.
Price action is currently testing the lower trendline of the ascending wedge pattern. A continuation to the downside could potentially open the way for the GBPUSD to test the 1.3500 level of support.
However, for this to materialize, the GBPUSD will need to post a convincing breakdown lower.
Given that price action closed rather flat on a weekly basis, a bearish close this week could potentially strengthen the downside bias.
This could mean that the cable could be looking to post further declines in the medium-term outlook.
Crude Oil Bounces Off Lower End Of The Range
WTI crude oil prices are posting modest gains rising over 1% on Monday. This comes as prices briefly slipped below the lower end of the range near 51.87.
Despite the current pace of gains, oil prices remain stuck within the range between 53.77 and 51.87. Only a strong breakout from this level will potentially confirm further direction in the commodity.
For the moment, the continuation to the upside could see the 53.77 level being tested.
On a weekly basis, we see that oil prices are trading flat for three consecutive weeks so far.
The stochastics oscillator is currently moving out from the oversold levels and gives support to the upside bounce.
Gold Prices Struggle To Breakout Above 1874
The precious metal continues to trade flat amid the US dollar strengthening. While prices have managed to stay afloat above the 1850 level of support, the upper resistance level near 1874 is proving hard to break.
As a result, gold prices remain caught within the 1874 and 1850 levels for the moment. The stochastics oscillator also signals the rather choppy movement within the said levels.
Price action on the higher chart timeframes also continues to remain mixed. As a result, we could expect to see gold prices staying below the 1874 level for becoming few sessions.
The bias still remains to the downside, however, a swing low is being formed near the 1835 level.
A close below this level will potentially open the way for gold prices to retest the lower support near 1817.79.
