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Global stocks and crude oil prices ended lower last week as the investors remain concerned about the fast-spreading Omicron coronavirus variant. This week the economic calendar light before the Christmas holidays, we doubt this week will see significant moves for the global markets after Thursday European session. The main event in the calendar is the latest GDP data from the UK and US on Wednesday.
On the earnings front, the companies due to release their results will be the Apparel and footwear giant Nike (NYSE: NKE) and the computer memory-maker Micron Technology (NASDAQ: MU) will be among those reporting earnings this week.
GOLD
Gold price after making a low at $1750, staged a smart recovery. The metal rose to a fresh monthly high last week as investors opted for the safe-haven asset ahead of Christmas and New Year holidays. While on Friday, the previous metal slightly reversed from the early gains after the King dollar regained some upside momentum.
For this week, $1815/16 remains the key resistance to watch. However, as long as the metal is trading above $1800, a pullback rally is likely to continue up to $1815 and $1830. On the downside, the first nearest support level is located at $1794. In case if it breaks below this level, it will head towards the next support level which is located at near $1786 then $1782.
DOLLAR INDEX
The US dollar, which is also often seen as the ultimate safe-haven currency, held firm against many other rivals, including the euro and commodity-linked currencies. The US dollar received strong upside momentum after the Federal Reserve took a significant hawkish turn last week.
This week, if the long-term bullish trend remains intact DXY can give a move towards above 97.00 levels in the coming weeks. On the downside, any meaningful pullback now seems to find some support near the 96.35 zones, below which the slide could further get extended towards the 96.00/95.80 region.
EURUSD
The currency pair remains under pressure as several European countries have introduced restrictions to stem the spread of the Omicron variant. On the other hand, last week the ECB said it would end its 1.85 trillion euro pandemic emergency asset-buying scheme next March.
Technically the overall trend still looks bearish and the next immediate support is at 1.1220 then 1.1180. On the upper side, in case the pair manages to settle above 1.1300, it will gain upside momentum and head towards the next resistance level at 1.1345 and 1.1370.
DOW JONES
Dow Jones futures extended losses in early morning trade Monday, worries about the economic fallout from the new Omicron virus outbreak that originated in South Africa has fueled a sharp sell-off. Meanwhile, the recent study showed that the risk of Omicron infection is five times higher than the Delta variant.
Technically the current price action signals suggest that a short term bearish trend remains intact. On the downside, the decline is more extensive, and it will be hard to rule out a run towards 34.750 and 34,450 if the bearish momentum continues. On the upper side, the first immediate resistance around 35,430 and then 36,000.
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Weekly analysis: Gold, USD, EURUSD and Dow Jones
“Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt.” – Paul Tudor Jones.
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