Weekly review: Gold, USD, EURUSD and Dow Jones


The previous week ended with a new wave of selling in stock markets. A new wave of selling was initiated after Fitch, one of the major credit rating agencies, downgraded the US credit rating. This move has significant implications for the financial markets and the global economy. There is a wide range of views as some feel that the chances of an economic slowdown in the US and severe market decline have increased significantly.

This week again the latest inflation data from the US, China and Germany completely dominate markets, and all eyes will turn to the July US inflation report, for more clues about the next moves of the Federal Reserve. Strong inflation data might cause Fed officials to consider raising its key interest rates in a move to curb inflation.

On the earnings front, the companies scheduled to release their last quarter financial results this week will be Palantir, Walt Disney, Roblox, Rivian, Alibaba, Upstart, AMC and UPS


Gold price traded with a strong bearish tone for the entire last week, with some upside momentum seen only on Friday supported by mixed job data. Although there was a slight rebound, it is clear that traders remain undecided on where to go, which attracts abundant attention from speculators. The overall sentiment remains under pressure as prices seem to be struggling to revive upside momentum. This week gold traders and investors should closely monitor the US CPI and PPI figures to get a clear picture of the metal's long-term direction.

From a technical perspective, The 1925/26 area of confluence has recently been held as a firm support, failure to defend the mentioned support levels has the potential to drag the pair further towards the 1918/10 support zone. On the upper side, in case the metal manages to settle above 1955, it will extend upside momentum and head towards the next resistance level at 1966/72.


The US dollar index which measures the greenback against major peers traded with a strong bullish momenutum throughout the first half of the last week but the index reversed from the weekly highs after the mixed US jobs data report was fueled by speculations the US central bank might end its tightening cycle. The recent rebound stalled at the upper trend line resistance around 102.80 and showed multiple failures in the lower time frames. The US CPI data is the key release this week for the dollar, which will provide hints to the Federal Reserve`s plans for future monetary tightening.

For this week, the first nearest support level is located at 101.50. In case it breaks below this level, it will head towards the next support level which is located near 101 and 100.80. However, a fresh demand for the pair can be anticipated once the USD rises above the 101.80 resistance. A break above this level will confirm a possible move to 103.10 and 103.30.


The currency pair started the new slightly lower and the initial bias remains neutral for the upcoming week. As of this writing, the pair trades below 1.0990. On Friday, EURUSD bounced back to above 1.1030 following the release of US NFP data but failed to break above the key resistance of 1.1040. This week, the movement of the US dollar is likely to significantly affect the currency pair. The latest German inflation data arrives on Tuesday. That's the next piece of major economic news that could alter the ECB's thinking on interest rates.

Technically the overall momentum remains mixed. However, a trade through 1.1050 will signal a resumption of the uptrend. The main trend will change to down on a move through 1.0900. On the upper side, the first major resistance is near the 1.1050 level. The next main resistance could be near the 1.1100 level, above which the price could start a steady increase towards the 1.1150/80 level. On the downside, immediate support is near the 1.0950 level. The next major support is near the 1.0900 level, below which the price might decline towards the 1.0840 support level in the near term.


Dow Jones and other major US indices ended Friday with notable losses after the most waited US employment report failed to impress investors. This labor market report showed 187,000 jobs were added to the economy and the unemployment rate dipped to 3.5%. Moving ahead, Dow is expected to remain under pressure this week by Fitch’s recent US credit downgrade as investors reduce their risk exposure. However, the US CPI report will likely have a significant effect on the Dow and other indices because the inflation data will hold more clues on the pace and size of future rate hikes.

From a technical perspective, Dow maintains a negative bias according to the daily chart. This week, If the short-term bearish momentum continues then the next key support area to watch is 34,800 then 34,550. On the upper side, If the Dow regains upside momentum and presses back above 35.500 then the key resistance area to watch is 35,700/50.

Read more - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-90