King Dollar has entered the trading week in a depressed fashion with prices sinking towards a fresh monthly low at 89.15 as of writing. With the U.S Dollar likely to remain pressured by political risk and uncertainty over the US trade policy, further losses could be on the cards… Taking a look at the technical picture, the Dollar Index remains heavily bearish on the daily charts. Prices are trading below the daily 20 SMA while the MACD has crossed to the downside. A decisive breakdown and daily close below 89.00 could encourage a decline towards 88.00 and 87.60, respectively.
EURUSD boosted by Dollar weakness
The EURUSD vaulted towards the 1.2440 resistance level on Monday thanks to softening US Dollar. With Dollar weakness potentially becoming a recurrent market theme, Euro bulls could be injected with a renewed sense of confidence to push prices higher. Focusing on the technical picture, the EURUSD fulfills the prerequisites of a bullish trend as there have been consistently higher highs and higher lows. A daily close above 1.2240 may invite an incline higher towards 1.2500. Alternatively, a failure for bulls to conquer 1.2440 could result in a decline lower towards 1.2300.
GBPUSD challenges 1.4200 resistance level
Sterling bulls were back in action on Monday with the GBPUSD punching above 1.4200 as of writing. While optimism over Brexit talks and expectations of a rate hike in May have supported the Pound, a key factor remains Dollar weakness. Sustained Dollar weakness could ensure the GBPUSD remains buoyed in the short term. Taking a look at the technical picture, the GBPUSD is bullish on the daily charts. Prices are trading comfortably above the 20 Simple Moving Average while the MACD has crossed to the upside. A daily close above 1.4200 could encourage an incline higher towards 1.4260 and 1.4300, respectively.
Yen bulls remain protected by uncertainty
The Yen weakened against the Dollar as fears over trade tensions between the U.S and China eased slightly. Investors recovered some appetite for risk after US Secretary Steven Mnuchin stated that America is having “very productive conversations” with Chinese officials. While the short-term optimism could continue stimulating appetite for riskier assets, the Yen remains protected by uncertainty in the longer term. From a technical standpoint, the USDJPY remains pressured on the weekly charts. Sustained weakness below 105.50 could encourage a decline towards 104.00. A scenario where bulls are able to push prices back above 105.50 could result in an incline towards 106.50.
Gold continues to glitter
Gold extended gains on Monday with prices rushing towards $1355 amid a broadly weaker Dollar.
With the combination of Dollar weakness and lingering trade war fears leaving investors on edge, Gold which is a sanctuary, is likely to remain heavily supported. Focusing purely on the technical picture, the yellow metal remains bullish on the daily charts. Prices are trading above the 50 Simple Moving Average while the MACD has crossed to the upside. A breakout and daily close above $1350 could result in a move higher towards $1360. Alternatively, weakness below $1350 could send prices back towards $1343.