This week huge volatility is expected to be back as the tensions heat up on the Russia-Ukraine border. The conflict will continue to deal a heavy blow to the global markets especially It is more clear after the Friday late-night market movement. On the other hand, the investors also waiting for the last FOMC meeting minutes, which is set to be released on Wednesday.
On the earnings front, the companies due to release their results will be Walmart, Shopify, Nvidia, Palantir and Airbnb will be among those reporting earnings this week.
The precious metal ended last week sharply higher as investors turned to safe assets on growing tensions between Russia and Ukraine. The main drivers for the precious metal remain the geopolitical tensions, inflation risks and the movement of the US dollar.
This week, the first resistance is located around $1865, a break above this level will confirm a possible move to $1872/76. On the downside, any meaningful pullback now seems to find some support near the $1840 zones, below which the slide could further get extended towards the $1832 and $1826 region.
The US Dollar Index, which measures the greenback’s value against the basket of six major currencies almost flat on Monday but the Index remained in favour as a safe haven currency as investors believe the Federal Reserve will step in to hike interest rates if prices keep running higher. Recently, St. Louis Federal Reserve Bank President James Bullard, told Bloomberg that he supports the Fed hike rates by 100 basis points by July 1, including one hike being 50 basis points.
This week, if the index stays above 95.00, then the next short-term resistance is located in the area of 96.45, a break above 96.45 will confirm a possible move to 96.90. On the downside, a breakdown through 95.00 would negate that bias and suggest a test of the 94.60 and 94.30 support regions.
The currency pair remains undecided as to which way its next directional break will be. During the last week, the currency pair retreat back to below 1.1380 after the buyers failed to break above the key resistance level of 1.1500.
For Euro this week, the first nearest support level is located at 1.1300. In case it breaks below this level, it will head towards the next support level which is located at near 1.1270 then 1.1220. On the upside, 1.1380 will act as an immediate and strong hurdle while 1.1420 will be a critical resistance zone because above this, bulls are likely to dominate.
Dow Jones started the new on a bearish note after the Index finished in negative territory on Friday. The overall momentum remains bearish after the US warned of an imminent Russian invasion of Ukraine. This week, dow traders should also monitor the release of January US retail sales numbers and Q4 results from the world’s largest retailer, Walmart.
For Dow, this week the immediate support is near 34,500. Any break and close below 35,500, the next support levels to watch 34,200 and 33,950. On the upper side, the first resistance at 34,950 any break above this level will open 35,400/700 minimum.
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