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A busy week is ahead for global markets. Meetings of major central banks with ECB, BOE and FOMC on the horizon return this week. However, all eyes are mainly on the US Federal Reserve bank this week as the US central bank is expected to provide a clear timeline related to its upcoming interest rate hikes. Markets have fully priced in a 50bp rate hike at this week's FED meeting,
On the other hand, the markets have a lot of economic data to digest this week which includes the US inflation data. The November CPI report is expected to show further signs that peak inflation is in place.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Accenture, Adobe and Oracle.
GOLD
The precious metal remains undecided as to which way its next directional break will be. The FED decision is the key release this week for gold. However, traders will also be watching the latest US inflation data which is set to be released on Tuesday. Technically, the medium-term trend remains supportive If the US dollar regains further upside strength this week on the back of further talk about an aggressive interest rate hike, we could see an extension to the weakness in the precious metals.
Technically the overall momentum remained bullish over the last few weeks. On the bullish side, this week the resistance stays above 1820, and a break above this exposes the index to the 1830/35 level. On the flip side, rejection and pullback from the 1820 resistance allow for a dip towards 1778 and with 1765/58 forming additional downside targets.
DOLLAR INDEX
The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, ended slightly higher last week as investors anticipate the US central bank will continue to increase interest rates faster and further than other developed countries. However, the greenback failed to close above the 105 level. It seems to me that long dollar positions are being liquidated and short positions are being established in recent weeks.
This week, if the index stays above 104, then the next short-term resistance is located in the area of 105.40, a break above 105.40 will confirm a possible move to 106. On the downside, a breakdown through 104 would negate that bias and suggest a test of the 103.60 and 103.20 support regions.
EURUSD
EURO ended flat on Friday as investors grew more cautious ahead of a key European Central Bank meeting this week. The market participants anticipate the central bank will keep their monetary policy on hold at Thursday’s meeting. Beyond the ECB meeting, the focus will be on the Eurozone inflation and PMI readings due on Friday.
For this week, the first nearest support level is located at 1.0480. In case it breaks below this level, it will head towards the next support level which is located near 1.0440 then 1.0400. However, a fresh demand for the pair can be anticipated once the Euro rises above the 1.0600 resistance. A break above this level will confirm a possible move to 1.0660.
DOW JONES
Dow Jones started the new on a bearish note after the Index finished in negative territory on Friday as investors continued to bet on further Federal Reserve tightening to bring decades-high inflation under control. This week, Dow trader's focus will turn to the FED meeting on Wednesday, looking for clues on future rate hikes by the central bank.
Technically the overall momentum remains bearish. For this week, the key support level is located at 33,100/000. In case it breaks below this area, it will head towards the next support level which is located at nearly 32.600/500. On the flip side, the first resistance at 33,850/34,000 any break above this area will open 34,400/600 minimum.
Check out the detailed weekly analysis with charts - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-59
On the other hand, the markets have a lot of economic data to digest this week which includes the US inflation data. The November CPI report is expected to show further signs that peak inflation is in place.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Accenture, Adobe and Oracle.
GOLD
The precious metal remains undecided as to which way its next directional break will be. The FED decision is the key release this week for gold. However, traders will also be watching the latest US inflation data which is set to be released on Tuesday. Technically, the medium-term trend remains supportive If the US dollar regains further upside strength this week on the back of further talk about an aggressive interest rate hike, we could see an extension to the weakness in the precious metals.
Technically the overall momentum remained bullish over the last few weeks. On the bullish side, this week the resistance stays above 1820, and a break above this exposes the index to the 1830/35 level. On the flip side, rejection and pullback from the 1820 resistance allow for a dip towards 1778 and with 1765/58 forming additional downside targets.
DOLLAR INDEX
The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, ended slightly higher last week as investors anticipate the US central bank will continue to increase interest rates faster and further than other developed countries. However, the greenback failed to close above the 105 level. It seems to me that long dollar positions are being liquidated and short positions are being established in recent weeks.
This week, if the index stays above 104, then the next short-term resistance is located in the area of 105.40, a break above 105.40 will confirm a possible move to 106. On the downside, a breakdown through 104 would negate that bias and suggest a test of the 103.60 and 103.20 support regions.
EURUSD
EURO ended flat on Friday as investors grew more cautious ahead of a key European Central Bank meeting this week. The market participants anticipate the central bank will keep their monetary policy on hold at Thursday’s meeting. Beyond the ECB meeting, the focus will be on the Eurozone inflation and PMI readings due on Friday.
For this week, the first nearest support level is located at 1.0480. In case it breaks below this level, it will head towards the next support level which is located near 1.0440 then 1.0400. However, a fresh demand for the pair can be anticipated once the Euro rises above the 1.0600 resistance. A break above this level will confirm a possible move to 1.0660.
DOW JONES
Dow Jones started the new on a bearish note after the Index finished in negative territory on Friday as investors continued to bet on further Federal Reserve tightening to bring decades-high inflation under control. This week, Dow trader's focus will turn to the FED meeting on Wednesday, looking for clues on future rate hikes by the central bank.
Technically the overall momentum remains bearish. For this week, the key support level is located at 33,100/000. In case it breaks below this area, it will head towards the next support level which is located at nearly 32.600/500. On the flip side, the first resistance at 33,850/34,000 any break above this area will open 34,400/600 minimum.
Check out the detailed weekly analysis with charts - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-59
