Euro struggles to hold onto gains

Euro (CME:E6M14)

The euro looks to have trouble holding gains from earlier this year as the foreign currency has lost significant ground vs. the US Dollar over the past few weeks. With the U.S. Dollar Index (NYBOT:DXH14) looking strong above 80.00 again, the euro now finds itself struggling to hold above 13700. Momentum in the euro favors the short side as recent price action has been trending lower, making lower lows and lower highs throughout. Action in the overnight session looks as though the market is going to fail below the 13709 area and sustain a decline back below the 13700 pivot on the chart. If this scenario does play out, there is a good chance that price could see downside follow through test the support band from 13633 – 13643. With that being said, U.S. Employment Situation was released today at 7:30 am CST and this will likely dictate the direction of the euro based off strength/weakness in the USD following the report.

Euro Currency, 30-minute Bar Chart (e-Signal)

Gold

After producing a significant negative signal with a break below 1,300, gold (COMEX:GCK14) price have spent the beginning of April moving sideways between 1,300.0 and 1278.0. The current market bias appears to favor the short side in gold as price action has been making relatively lower lows and lower highs since topping in mid-March. Momentum is sideways to negative as a result of the most recent digestive action in price. Gold prices appear to be kept on the defensive below the 1,300.0 technical (and psychological) pivot.

In the event that price can produce a rally above the previously mentioned 1300 level, the Fibonacci Confluence Zone around 1316.5 will provide additional resistance on the chart and a potential opportunity to short gold from a more favorable entry price. Above here, the directional bias would transition to more of a neutral tone and aggressive bears should reconsider the tone of the market. Regarding downside targets in the gold, the initial support pivot will likely come into play around 1278.0 followed closely by a support band from 1265.6 – 1269.5. In the event that these pivots fail, gold prices could very well continue to sell off toward the previous low from late January around 1238.7.

Gold, 30-minute Bar Chart (e-Signal)

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