The GBP/USD also gained ground mostly because of short-term oversold conditions and the weaker dollar. The dollar fell amid speculation the Fed will refrain from reducing monetary stimulus at this week’s two-day policy meeting on December 17 and 18. Traders are also reacting today to a lower than expected U.S. Flash Manufacturing PMI report released this morning.
Oversold conditions and a lower dollar also helped boost February Gold prices. After turning the main trend to up on the daily chart last week on a move to $1267.50, the market plunged sharply lower. Buyers stepped in on Friday, however, to temporarily stop the slide. If a secondary higher bottom does form at $1219.50 then this could serve as a sign that a bottom has been reached at $1210.10. If the Fed refrains from tapering on December 18 then look for the dollar to plunge and for gold to accelerate to the upside.
February crude oil is also receiving support from oversold technical conditions and a weaker dollar. The market made trade sideways to higher until December 18 when the latest weekly inventory figures will be released as well as the Fed monetary policy statement. Last week, the Energy Information Administration reported a 10.6 million barrel drop in supply. Many traders believe the figure was overstated and are looking for some kind of an adjustment this week.