USD/JPY struggles near multi-week lows, just below 103.00 mark

• Sustained USD selling bias failed to assist USD/JPY to preserve its early modest gains.
• The risk-on mood undermined the safe-haven JPY and helped limit losses for the pair.
• The set-up favour of bearish traders and support prospects for further near-term losses.

The USD/JPY pair languished near the lower end of its daily trading range, with bears awaiting some follow-through selling below the 103.00 mark.

The pair failed to capitalize on its Asian session uptick, instead met with some fresh supply near the 103.30 region and dropped to near three-week lows on the first trading day of 2021. The intraday pullback of around 30-35 pips was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

The likelihood of additional US financial aid package and expectations that the Fed will keep interest rates lower for a longer period kept the USD depressed through the first half of the trading action on Monday. However, a combination of factors weighed on the Japanese yen and extended some support to the USD/JPY pair.

Gold Price Analysis: XAU/USD eyes monthly top near $1,907 as Trump signs covid aid package – Confluence Detector

Gold prices stay positive near a one-week high, currently up 0.80% while easing from the intraday high of $1,900.35 to $1,895, during early Monday. In doing so, the yellow metal extends the last Wednesday’s recovery moves from $1,859 toward the monthly top as the market’s sentiment improve on US President Donald Trump’s signing of the coronavirus (COVID-19) aid package.

Following his initial rejection, Trump surprised global markets during the early Asian trading while signing the US covid aid package for $600 paycheck and an additional $300 weekly unemployment supplement, per the New York Times.

Also supporting the market sentiment could be the extension of Brexit optimism and a lack of data/events amid the year-end holiday season.

Gold: Key levels to watch

Technically, the yellow metal’s ability to stay past 61.8% Fibonacci retracement on the monthly chart, around $1,889, propels the bulls to eye 100-SMA on one day (1D), near $1,898 offers as an immediate target ahead of the $1,900 round-figure.

However, Pivot Point one-month (M1) Resistance 1, coupled with the monthly peak surrounding $1,907 lures the gold buyers for now while November’s top near $1,965 can lure the bullion buyers afterward.

Meanwhile, a downside break of $1,889 level, resistance turned into support, can offer short-term support during the quote pullback moves.

During the commodity’s weakness past-$1,889, 5-SMA on four-hour (4H) near $1,884 and the previous week’s low near $1,855 could gain the market’s attention.

About Confluence Detector

The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

Source: https://www.fxstreet.com/

EUR And USD Adds Over 30 Pips As Risk Assets Gain Ground

EUR/USD adds over 30 pips as risk assets gain ground

• EUR/USD trades at 1.1959 versus 1.1923 in early Asia. 
• Corona virus vaccine optimism and buoyant equity markets weigh over the dollar. 
• Fed's Powell says the US economy remains in a damaged state.

The bid tone around the single currency strengthened on Tuesday, pushing EUR/USD higher, as stock markets gained, weakening safe-havens such as the greenback. 

The pair traded near 1.1959 at the time of writing, representing a 0.30% gain on the day, having found buyers near 1.1923 in Asia. 

Vaccine hopes boost risk appetite

Major Asia indices rose over 1% on prospects of a COVID-19 vaccine. Drugmaker Moderna said Monday that it will apply for the US and European emergency authorization for its COVID-19 vaccine, with full results from its late-stage study showing 94.1% effectiveness with no serious safety concerns. 

Last month, drugmakers Moderna, Pfizer, and AstraZeneca announced positive results of their respective experimental vaccines, putting a strong bid under the risk assets. Since then, a massive wave of liquidity has come into equities, as noted by Reuters, weakening demand for anti-risk assets such as the US dollar. 

The trend looks set to continue, as markets believe the Federal Reserve would boost stimulus to counter the recent resurgence of coronavirus. "Recent news on the vaccine front is very positive for the medium term," Powell said in testimony released Monday while adding that the economy remains in a damaged and uncertain state. 

As such, the EUR/USD pair could have another go at the psychological hurdle of 1.20. The bulls failed to establish a foothold above that level on Monday on month-end dollar demand. 

Data wise, the focus would be on the German labor market report and Eurozone's preliminary Consumer Price Index for November. A big beat on expectations will likely draw more substantial buying pressure for the common currency. 

• ECB should lengthen QE purchases to counter strong euro – IIF

Technical levels

EUR/USD

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