USD remains soft as US stimulus talks drag on

USD remains soft as US stimulus talks drag on

EURUSD Pulls Back Off Recent Highs

USD remains soft as US stimulus talks drag on - 1

The euro currency was trading soft on Monday with price action closing nearly flat.

This comes as the euro continues to post a modest descent after briefly testing above 1.2170 last Friday.

For the moment, a local swing low has formed near 1.2080. As long as this low holds, we could see price action resuming the uptrend.

However, a close below this low and a potential retracement back to this level could confirm the downside.

The key support area is likely to come from the dynamic support of the trend line. This is likely to coincide near the 1.2000 level in the near term.

GBPUSD Drops As Brexit Trade Concerns Mount

USD remains soft as US stimulus talks drag on - 2

The British pound sterling was trading rocky on Monday as prices were in a steady decline since morning.

This comes as the UK and the EU continue with the post-Brexit trade talks which have failed. The GBPUSD fell, as a result, briefly slipping below the 1.3300 level of support.

However, price recovered off the lows before managing to close above this level once again.

For the moment, it seems like the 1.3300 level will hold out as support. But if price breaches this level, then we could expect further declines.

The Stochastics oscillator is currently nearing the oversold levels, which could suggest a possible retracement in the near term.

WTI Crude Oil Gives Back Gains

USD remains soft as US stimulus talks drag on - 3

Oil prices are trading weaker, down about 0.18% on the day. The declines come after oil price posted steady gains into last Friday’s close.

However, price action is pulling back after testing new highs of above 46.50. The declines could see price stalling near the 45.26 level of support.

As long as this support holds, we could expect the upside to resume. Oil prices will need to break past the previous highs to confirm the continuation to the upside.

However, failure to post new highs could signal a move lower.

A close below 45.26 could potentially expose oil prices to test the support level of 43.50 next.

Gold Prices Rise 1%, Breaking Past 1850

USD remains soft as US stimulus talks drag on - 4

The precious metal is posting a strong recovery as price action zoomed past the 1850 handle.

The gains come after gold prices managed to settle comfortably above the key price level of 1818.80.

With the 1850 level giving way to further gains, gold prices could continue higher.

The next key level of interest is the 1911.50. But prices could likely test this level if there is some support forming near the current levels.

This could mean that gold prices might retrace back to the 1817.80 or the 1850 levels.

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.