Euro Inches Closer To 1.2050

The euro currency resumes the declines with prices now inching closer to the 1.2050 level of support.

The declines come as the euro currency remains in a short term downtrend for the moment. This is evident from the lower highs that have been forming since prices retested the trendline from below on the 6th of January.

The current declines to the 1.2050 could see a possible rebound taking place. This will most likely keep the EURUSD within a sideways range of 1.2177 and 1.2050.

A break out from this range could possibly set the direction for the next leg.

The stochastics oscillator is oversold and therefore coincides with the support level near 1.2050 likely to hold up in the short term.

GBPUSD Double Top Pattern In Play

The British pound Sterling has formed a double top pattern on the four-hour chart and prices broke down below this level on Friday.

As a result, this bearish pattern could possibly see the cable likely to continue to push lower. The previous support level near 1.3506 will likely come in as the downside target.

However, considering that the stochastics oscillator is also oversold but a possible rebound is likely to occur. This would see the GBPUSD pushing back to retest the 1.3611 level.

Establishing resistance at this level could further validate the downside by his.

However, if the cable manages to close above the 1.3611 level, then it would invalidate the double top pattern and as a result, we could possibly see either a consolidation or a possible move higher.

Oil Prices Give Back Gains

Crude oil prices were down close to 3% on Friday. This comes even as prices attempted to make a rebound earlier in the week on Thursday.

However, this rebound led to a lower high emerging. Following this, prices gave back the gains on Friday and lost the support from the trend line as well.

For the moment, the bias still remains to the upside. We need to wait for evidence to see a lower high forming in order to confirm the downside.

For the moment, the lower target remains the support area near 49.00.

In the short term, any rebound in prices could see the previous swing low near 52.30 playing a key role. If there is any rebound, then prices are likely to stall near this level.

A strong close above 52.30 could potentially see another short term game in prices.

Alternately, if we see a reversal near 52.30 or a continuation from the current levels, then we could expect the retracement towards 49.00.

Gold Prices Hold Steady In A Sideways Range

The precious metal was also trading weaker on Friday with prices down over 1%.

However, price action remains subdued for the moment with the sideways range between 1850 and 1818 levels holding up for the moment.

The lack of further bearish momentum is likely to see this possible consolidation resulting in either a strong retracement back to the upside. Alternatively, failure of support near 1818 could accelerate the decline.

The stochastics oscillator currently remains well above the oversold levels thus indicating further room to the downside.

However, the support level near 1818 is likely to hold up for the moment. As a result, gold prices are likely to continue trading in a sideways range for a while.

To the upside, only a strong breakout above the 1850 level is likely to accelerate any gains that might come its way. The next key target will be the 1911.50 level of resistance.