Higher-yielding currencies and commodities gave up gains to the safe-haven U.S. Dollar after House Republican leaders failed to assemble sufficient
Higher-yielding currencies and commodities gave up gains to the safe-haven U.S. Dollar after House Republican leaders failed to assemble sufficient support to pass a bill that would have raised taxes on wealthy Americans, igniting fears that U.S. politicians won’t be able to reach a compromise in enough time to avoid the fiscal cliff.
Negotiations between Democrats who are reluctant to cut spending and Republicans who are soft on raising taxes are at a standstill as the deadline to avoid the fiscal cliff rapidly approaches. Investors reacted by selling risk and buying the safer dollar because of the fiscal cliff’s threat to U.S.and global growth.
Although the GBP/USD is finding support at 1.6191, it too is set up for a further decline. Its main range is 1.6001 to 1.6306 with a downside target at 1.6154 to 1.6118. Weaker global growth threatens to send the U.K. economy back into a recession that it has been trying to claw out of for the past several months.
February gold finishing the week on a weak note after suffering through one of its worst week’s of the year. Technical factors are providing some support at this time. Based on the main range of $1538.10 to $1800.00, its key support zone is $1669.05 to $1638.15. Today’s session found the precious metal trying to establish support on the lower, or Fibonacci price level.
After showing promise earlier in the week, February crude oil traded lower after U.S.budget talks stalled. The possibility of a slow down in global growth is likely to mean less demand for crude oil which would increase the already high supply inventory. The current range is $85.76 to $90.90 which makes $88.33 a major pivot price.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.