EUR/USD

EUR/USD remains sidelined near 1.2150 as China data fails to trigger dollar selling. Coronavirus concerns overshadow vaccine optimism and China data while keeping risk under pressure. The options market sees low odds of a continued rally heading into the year-end.

On the 4-hour chart, a double top at 12177 has been confirmed with the neckline support at 1.2059. A break below that level would confirm a double top breakdown, a bearish reversal setup, and shift risk in favor of a drop to 1.1941 (target as per the measured move method).

On the higher side, the pair needs to establish a foothold above 1.2177 to invalidate the double top and keep the bullish trend going.

GBP/USD

GBP/USD holds gains below 1.3350 ahead of the UK jobs data release. The US dollar finds its feet amid growing coronavirus concerns and fresh restrictions. Brexit and virus updates will be closely eyed.

Technically, the ability to cross 100-bar EMA directs GBP/USD buyers towards a falling trend line from December 04, at 1.3410 now. However, a clear upside beyond the same will be critical to watch. Meanwhile, a downside break below 100-bar EMA, currently around 1.3320, will recall the sellers targeting 1.3250 and the monthly low near 1.3130.

USD/JPY

USD/JPY buyers attack the upper end of recent trading range between 104.00 and 104.10. Bank of Japan (BOJ) eyes extension of corporate funding during Friday’s decision. As per Nikkei, BOJ may cite fresh economic fears.

The USD/JPY pair is still on the bearish side, according to intraday technical readings. The 4-hour chart shows that the latest advance stalled around a mildly bearish 20 SMA, which develops below the largest ones. Technical recovered from oversold readings but lost their bullish strength before reaching their midlines. The pair bounced from a critical support level, with the bearish potential set to increase only on a break below 103.50.

Support levels: 103.85 103.50 103.10

Resistance levels: 104.30 104.75 105.10

Gold 

Gold trades firmer below $1840, as the US dollar recovers ground amid broad risk-aversion. Pre-Fed caution combined with virus concerns dampens the market sentiment, lifting the greenback’s haven demand. 

Gold (XAU/USD) attempts another bounce on Tuesday, although remains within the familiar rage of $1820-$1850, as the focus now shifts towards Wednesday’s FOMC decision.  

Gold finds its feet, benefiting from the downbeat market mood, as the growth in coronavirus infections and fresh lockdowns offset the optimism driven by the vaccine inoculations. Meanwhile, increased odds of about $1 trillion covid relief package likely to be reached before the X-mas/ New Year holiday also lend support to the XAU bulls.

WTI

WTI has carved out a triangle pattern on the 4-hour chart. The 4-hour chart shows oil is trapped in a contracting triangle with resistance, currently at $47.37, and support at $45.78. A breakout would imply a continuation of the broader uptrend from lows below $34 seen in early November and expose resistance at $49.31