With the Euro rapidly approaching the major retracement zone at 1.3577 to 1.3744, traders have to be asking themselves if overcoming this area means investors are betting on a rate hike by the European Central Bank or do they believe that Europe is overcoming its fiscal problems.

The weaker U.S. Dollar overnight has put December Gold in a position to rally further following a strong surge overnight to $1362.00. Although the rally stopped short of the recent main top at $1366.00, upside momentum seems to be building. Traders appear to be waiting for the Euro to take out its last main top at 1.4028 before attempting to push this market through the resistance.

The Australian Dollar and the Japanese Yen are likely to be the main focus next week as both are expected to be big movers if the global equity markets expand to the upside as expected.

Money continued to flow out of T-Bonds and Gold which may be an indication that investors are gearing up for a stock market rally next week.

The USD JPY is consolidating inside the retracement zone created by the 84.73 to 86.37 range. This zone is 85.55 to 85.35. If the market can form a support base then look for it to make a run at the swing top at 86.37. Not only will a breakout over this level turn the main trend to up on the daily chart, but it will also confirm last week’s weekly closing price reversal bottom.