Weekly review: Gold, USD, EURUSD and Dow Jones



Last week the global stocks and commodities ended mostly in negative territory driven by the mixed US jobs report and rising inflation. This week, the main event on the calendar for monetary policy is the meeting of the Reserve Bank of Australia on Tuesday morning. On the other hand, the traders and investors are likely to monitor the minutes from the March Federal Open Market Committee policy meeting.


The safe-haven metal was moderately hit by the turmoil seen on the markets in the last few days as inflation fears and rising US yields pulled down bullion, along with the strong US dollar. Moving ahead to the new week, the metal is expected to remain under pressure driven by the prospects of the Federal Reserve hiking rates by 50-bps in the May meeting.

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For this week, $1906 is the key support area to watch, any break below this level will open $1890/80 minimum. On the flip side, the bullish breakout of $1950 is likely to push the metal into a new trading zone, which may offer further buying opportunities until $1965/74.


The US dollar index rebounded and continued to shine last week as large participants generally move to the safe-haven US dollar amid concerns of higher inflation and the latest peace talks between Russia - and Ukraine failed to offer a diplomatic exit to the war.


This week, the key resistance is located for the index around 99.40, a break above this level will confirm a possible move to 100/100.40. On the downside, any meaningful pullback now seems to find some support near the 98.00 zones, below which the slide could further get extended towards the 97.60/40 region.


The currency pair got an early lift during the last week but reversed from the early gains after the buyers failed to hold the upside momentum. The euro however retreated again after the Eurozone and Germany’s final PMI readings came lower than preliminary estimates. In the coming week, again the trend of the euro would largely depend on the trend of the dollar index and updates on the Russia -Ukraine war.


This week, good support is expected at the 1.0950/40 area, with this zone having held last week while further down, demand is also expected around 1.0910/1.0890, which will act as the next area of support. On the flip side, the first immediate resistance level for the pair is 1.1090, then the stronger resistance is 1.1140, which is important to be stable above it for a continuing rise to 1.1180 and 1.1230 levels.


The Dow Jones ended in negative territory on Friday after the US employment report failed to impress investors. The NFP data showed that 431,000 jobs were added last month, versus estimates of 490,000. For this week, the main drivers for the Index remain the ongoing conflict between Russia and Ukraine and the FOMC meeting minutes on Wednesday.


For Dow this week, the first nearest support level is located at 34,500. In case it breaks below this level, it will head towards the next support level which is located at near 34,300 then 33,950. On the upside, 35,050 will act as an immediate and strong hurdle while 35,400 will be a critical resistance zone because above this, bulls are likely to dominate.

Read the complete analysis here - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-24