Weekly review: Gold, USD, EURUSD and Dow Jones


Geopolitical instability and inflation remain a top concern while many market participants continue to digest the shift of focus away from inflation and back to economic slowdown following the last week's European and US manufacturing reports showing a considerable growth slowdown.

This week the world’s major central banks, the Reserve Bank of Australia and Bank of Canada will kick off this month's central banks policy meetings. On the other hand, China's inflation will be the highlight of the final trading day of the week.

On the earnings front, the companies scheduled to release their last quarter financial results this week will be GameStop, Costco, Chewy and Lululemon.


The precious metal ended last week firmly in positive territory. Meanwhile, the metal failed to close above $1800 on Friday after the robust US jobs report reinforced bets for aggressive Federal Reserve rate hikes. The main attraction for the gold this week is the US ISM services PMI, PPI and the latest inflation data from China.

Technically, the medium-term trend remains supportive while If the US dollar regains upside strength this week we could see a pullback in the precious metals. For this week, the first nearest support level is located at 1772. If it breaks below this level, it will head towards the next support level, located near 1760 then 1752. On the flip side, the first immediate resistance level for the metal is 1810, then the stronger resistance is 1818/20.


The US dollar index which measures the greenback against major peers traded with a strong bearish tone for the entire last week, with some upside momentum seen only on Friday after the release of a better-than-expected US employment report but later most other major currencies pushed back up to unchanged on the day against the USD. However, we can expect some recovery by this week, the key events to watch are the US service's PMI and PPI numbers.

Technically the current price action signals suggest that the medium-term bearish trend remains intact after the buyers failed to remain momentum following the release of US NFP data. On the downside, the decline is more extensive, and it will be hard to rule out a run towards 103.80 and 103.50 if the bearish momentum continues. On the bullish side, the resistance stays above 105.10, and a break above this exposes the Index towards the 105.50 and 105.80 levels.


EURUSD started the new on a positive note, the currency pair reached a fresh monthly high of 1.0582 on Monday Morning. Last week the markets witnessed the euro recording solid gains in relation to the US dollar supported by dovish comments from FED policymakers. Moving ahead to this week, there are no important economic reports scheduled to be released in Europe this week except the Eurozone GDP data.

This week, the critical resistance for gold is located above 1.0550, a break above this level will confirm a possible move to 1.0600 and 1.0640. On the downside, any meaningful pullback now seems to find some support near the 1.0470/30 zones, below which the slide could further get extended towards the 1.0400 and 1.0370 regions.


The Dow Jones ended flat on Friday as investors scaled back their expectations of a hawkish Fed after releasing a better-than-expected US employment report. The NFP data showed that 263,000 jobs were added last month, versus estimates of 200,000. This week, the Dow traders should monitor guidance and comments coming from central banks of major economies about the rising inflation.

From a technical perspective, The 34,000 and 33,800 area of confluence has recently been held as firm support, failure to defend the mentioned support levels has the potential to drag the pair further towards the 33,200 support zone. On the upper side, in case the index manages to settle above 34,700, it will continue upside momentum and head towards the next resistance level at 35,000/100.

Trading is risky and your entire investment may be at risk. Please ensure that you fully understand the risks involved.

Read more here - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-58