The EURUSD could stumble into the New Year under renewed pressure as the divergence in monetary policy between the ECB and Fed encourages sellers to attack. With the heavily discussed Euro parity dream becoming a major theme in 2017, the EURUSD may find itself depressed moving forward as investors offload the currency pair. Uncertainty remains the name of the game when tackling the Euro while the Dollar may be set to appreciate further amid the renewed rate hike expectations. Technical traders may exploit the combination of Euro weakness and Dollar strength to send the EURUSD to fresh 14 year lows below 1.0350 in the medium term. Previous support around 1.050 could transform into a dynamic resistance which opens a path lower towards 1.0350.

USDJPY bulls maintain control

The USDJPY has exploded into gains in the final quarter of 2016 with prices surging over 1800 pips from the 100.00 support. A resurgent Dollar from the renewed expectations of a US rate hike has been the driver behind these phenomenal gains with further inclines expected in the future as bullish investors exploit the upside momentum. Technical traders may pay extra attention to how prices stabilize around the 117.50 resistance levels which if broken could open a path higher towards 120.00. Lagging indicators such as the MACD and moving averages remain in the favour of the upside. This bullish setup remains valid on the daily timeframe as long as bulls can defend the previous higher low at 114.50.

Sterling gearing for another decline

The persistent Brexit anxieties have punished the Sterling considerably this year with the pain expected to roll over into 2017 as uncertainty intensifies. The sheer lack of buying sentiment towards the currency coupled with a strengthening Dollar could make the GBPUSD a seller’s choice moving forward. With concerns heightened over the Brexit woes impacting economic growth, Sterling may be exposed to further downside risks. From a technical standpoint, the GBPUSD looks exhausted on the daily and weekly charts with a breakdown below 1.2200 sparking a selloff towards 1.2100. A strengthening Dollar could make the GBPUSD parity dream a reality in the future if bears manage to conquer the heavy 1.200 support.

Commodity spotlight – Gold

Gold experienced a sharp rebound during trading on Tuesday from the combination of Dollar weakness and profit taking. Regardless of the short-term gains, the metal may remain pressured by the prospects of higher US interest rates in 2017. The Dollar may conclude the year around 14-year highs with speculators expecting further gains amid the improving sentiment towards the US economy. While the longer term trend for Gold remains tilted to the downside; an intraday breakout above $1150 could open a path towards $1175.