USD continues to weaken on hopes of further stimulus

USD continues to weaken on hopes of further stimulus

Euro Rises To The Highest Levels Since 2018

USD continues to weaken on hopes of further stimulus - 1

The euro currency is posting strong gains, rising over one percent on the day. The gains largely on the back of a weakening US dollar.

Earlier on Monday, the euro gave back the gains after testing the 1.2000 level. However, this decline saw prices retesting the trend line for support.

A rebound from this trend line saw price action breaking past this previous resistance level.

At the time of writing, the EURUSD currency pair is trading above the 1.2000 level.

The Stochastics oscillator is however posting a lower high. This could signal a possible correction in the near term.

The lower price level of 1.1900 is likely to act as support during this retracement.

GBPUSD Attempts To Break The Trend Line

USD continues to weaken on hopes of further stimulus - 2

The British pound sterling is posting strong gains on the back of a weaker dollar. After price action consolidated above the 1.3300 level, the cable is attempting to push higher.

For the moment, prices are stuck near the trend line. As long as the trend line holds as resistance, we could see the sideways consolidation to continue.

However, in the event of a breakout off the trend line, then the GBPUSD will be aiming for the 1.3500 level next.

For the moment, with the support level firmly established at 1.3300, the GBPUSD will be looking to make further gains to the upside.

WTI Crude Oil Losing The 45.00 Handle

USD continues to weaken on hopes of further stimulus - 3

Oil prices are trading weaker on Tuesday. The declines come despite the US dollar taking a strong hit.

The move to the downside comes after oil prices failed to make any big moves to the upside.

As a result, WTI crude oil was consolidating around the 45.00 level for a considerable period of time.

After losing this handle, oil prices are likely to push lower. The next key support is near the 43.50 level.

However, we expect the pullback to see prices retracing the 45.00 handle.

If resistance is firmly established here, then we could expect to see further declines down to the 43.50 level.

Gold Prices Get A Boost From Weaker USD

USD continues to weaken on hopes of further stimulus - 4

The precious metal has been posting strong gains on the back of the US dollar. Gold prices are up nearly 2% intraday on Tuesday.

The rebound also coincides with the impending correction in gold, as mentioned a day before. For the moment, we expect prices to retrace to the 1817.80 level.

If this level holds, then gold prices could establish resistance. This will in turn renew the downside bias in the precious metal.

The 1800 level once again comes into the picture, with the potential for gold to post further losses.

John Benjamin Macro-Analyst at Orbex

John Benjamin is a Macro-Analyst at Orbex. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.