Today's weakness in the Euro/USD (so far) has held important support in the 1.3080/50 area, which represents a former 6-week upside breakout plateau.

As long as EUR/USD respects the integrity of the support zone, the recovery rally off of 1.2620 (January 15) will remain intact.

As we speak, EUR/USD is rebounding off its intraday low at 1.3075 to 1.3135, which is providing a bit of a tailwind for spot gold prices.

As for gold, the earlier weakness probed, but did not break, the prior pullback low at $1714.32. Spot gold has since pivoted back to the upside to $1733 in what I consider to be a very impressive performance amidst a nasty risk-off adjustment period this morning.

If gold manages to hurdle its high at $1740.40 (Sunday evening), upside acceleration towards $1800 could unfold in the upcoming hours, also benefiting the SPDR Gold Shares (GLD).

Only a decline that breaks today's low at $1716.39 will argue that a near-term correction likely is in progress.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.