EUR/USD lost some of its momentum in the last two trading days, but bulls still appear to be confident following the channel breakout and successful retest of the 1.14 support level. The hourly RSI is not yet showing overbought conditions, suggesting the currency pair might still have some room to the upside. The next major levels to watch to the topside are 1.1490 and 1.1570. However, it is worth noting that rate expectations in the Eurozone are decreasing again following the dovish ECB press conference. The EUR rally is therefore now primarily driven by Dollar weakness.
GBP/USD had an impressive rally since the end of December, and it is not showing any signs of weakness yet. However, the resistance ahead of 1.33 is expected to be heavy and Cable would likely struggle to overcome that hurdle given the high degree of uncertainty around Brexit. To the downside, traders might want to keep an eye on the 76.8 % Fibo of the October-December decline, which lies around 1.31, followed by the 200 DMA (currently around 1.3060).
After a brief period of consolidation, Gold (XAU/USD) managed to clear the resistance at $1300 and extend gains to $1303. With another major psychological resistance level behind it and the US Dollar extending losses, Gold bulls feel increasingly confident. The next hurdle lies at $1328, followed by $1366. The precious metal is currently benefiting from a weak Dollar and a risk-off sentiment in stock markets. Should the US and China fail to reach a trade deal soon, demand for Gold could potentially increase.
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US equities continue to welcome any high-risk event being put in the rear-view mirror – especially when rates markets look prime to consolidate lower