The week started with a flow of negative charges starting from downbeat data from china, elections in France showed ant-fiscal pact Mr. Holland wins first round, followed by a deeper contraction in Euro's manufacturing and services sectors. Markets were unpleasant; where risky assets took a harsh hit, looked powerless awaiting a helping hand, which may find in the awaited FED meeting Wednesday.
With the lack of economic releases this afternoon, the negative sentiment is expected to continue dominating the scene. The EUR/USD pair fell sharply after completing a test of the 50-days SMA, where the overall ranging stance remains intact so far. The pair has formed a possible bearish pattern, thus we look for a retest of the major psychological support at 1.3000, which is the main barrier towards further weakness for the euro, as taking 1.3000 could open the door to resuming the bearish trend eying 1.2650. The main resistance level to watch within the upcoming period is 1.3210-1.3220.
GBP/USD maintained the strong rally, however as we mentioned previously the negative sentiment over global growth could slightly tie the pair's upside potential, despite that the pair continues to be robust. Over the near term, pessimismcould push the price lower however 1.6060 followed 1.6000 could form a good support level, while the main target and resistance level resides at 1.6165.
USD/JPY reversed on haven demand, after testing near 81.80 resistance the pair resumed the bearish direction currently trying to settle below 81.20 support level. Further downside towards 80.50-80.00 area is anticipated; however we maintain the bullish outlook, where a dip to that area could be another opportunity to long the pair. On the other hand taking 81.80 shall signal we are done with bearishness over the short term.
Gold continues to trade with a downside bias, pushing in line with the median of the descending channel, where it managed settle below 1630.00 support today, which is a negative sign per se, therefore, unless price retraces to hold above the level again; downside targets could extend to 1610.00 and maybe lower. While holding back above 1630.00 could revive the bullish potential.