USD turns volatile as Powell testifies to Congress
EURUSD Perched In Resistance Area
The euro currency is strongly consolidating within the resistance levels of 1.2177 and 1.2144.
Price action managed to rise to the upper level of the range before giving back the gains. The volatility in the tight range comes as the Federal Reserve Chairman Jerome Powell testifies to Congress.
A breakout above 1.2177 could open the way for the common currency towards wider gains. This will potentially see price action rising to test the highs from January this year.
Alternately, if prices fail near the resistance level then we expect a move back lower.
To the downside, support at 1.2050 should hold the declines for the moment.
The British pound sterling, which has already seen a strong bull run got another boost on Tuesday.
The UK Government prepared a roadmap towards re-opening its economy. This puts further upside pressure on the currency pair which is already enjoying a strong rally.
Price action is trading outside the rising price channel currently. With the Stochastics oscillator firmly in the overbought levels, the upside momentum could fail.
Any downside corrections could stall near the 1.3951 level of support for the moment.
Given that the currency pair has been pushing higher on a steady note, we could expect a brief pullback in the near term.
WTI Crude Oil Pulls Back From A New 13-Month High
Oil prices surged higher intraday on Tuesday. Prices tested a new 13-month high of 62.96 in the early Asian trading session.
However, since then, oil prices gradually drifted back lower. The test of support near 60.87 confirms that prices are well supported at this level.
However, for the short term, oil prices will need to breakout higher and continue further to maintain the bullish trend.
The Stochastics oscillator on the four-hour chart is also likely to signal another push to the upside.
For the moment, the line in the sand is the 60.87 technical support. If oil prices lose this support, then we expect a deeper correction down to 57.35 or toward the 19 Feb lows of 58.56.
Gold Gains Slow As Price Approaches 1817.79
The precious metal pulled back just a few points away from the 1817.79 level of technical resistance.
The Stochastics oscillator which is currently signaling a hidden bearish divergence could see a continuation in price to the downside.
This is unless, of course, the precious metal manages to breakout above the 1817.79 price level. Such a move will potentially open the way toward the 1850 handle.
Meanwhile, if prices drift lower then we could expect a move closer to the 1764 level of support. However, it is unlikely that this level of support will be tested once again.