Weekly review: Gold, USD, EURUSD and Dow Jones


Global markets ended mixed last week as investors remain concerned about the prospect of further monetary tightening by various central banks. This week central banks' rate hike expectations and concerns over China’s economic recovery continue to hang over markets and the bulk of economic data will be released on Tuesday and Wednesday.

The key data this week will once again be the FOMC as we get the latest minutes from their most recent meeting. The minutes are expected to provide more details about how the FED policymakers view cooling inflation and any hint of a pause in rate hikes.

On the earnings front, the companies scheduled to release their last quarter financial results this week will be Walmart, Cisco, Target and Home Depot.


Gold price ended last week on a bearish note after the corrective growth of the USD. The bearish sentiment was also driven by hawkish comments from Federal Reserve officials and rising U.S. Treasury yields. While considering the bearish momentum, the precious metal is trading near the critical demand zone on the weekly time frame. So, there may be a chance the metal can find strong buyers near $1900. Fundamentally the gold price is expected to be extra volatile this week due to a busy economic calendar and all eyes remain on Wednesday’s FOMC minutes.

gold neww

For this week, the metal supported at $1900 level, any break below this level will open the doors to $1890/85. On the other side, the bulls will try to move above the short-term resistance level at $1920. In case this attempt is successful, it will head towards the resistance which is located at $1932. A move above $1932 will push the metal towards the key resistance area 1942/45.


The US dollar is one of the best performing G10 currencies so far this month. The dollar index, which tracks the U.S. currency against six major peers ended in positive territory on hawkish FED talks. Federal Reserve Governor Michelle Bowman talked about potential further increases in U.S. interest rates to meet the 2% inflation target. The upside momentum was also booted on Friday following the release of better-than-expected US PPI data. For this week USD traders should closely monitor Wednesday’s FED meeting minutes and comments from FED speakers for clues on the timing of forthcoming changes to Fed policy settings.


On a weekly time, frame, the overall movement remained bullish for the Dollar. If the bullish momentum continues the next upside levels are to watch 103.10 and 103.40. On the downside, the immediate support is near 102.40, and a further breakout below this area could lead the pair towards the next support level of 102 and 101.80.


Euro price action remained volatile, appreciated against most currencies last week but failed to extend the gains against the king dollar. This week, the movement of the US dollar is likely to significantly affect the currency pair. On the other hand, the main attraction for EURO this week, the German Zew economic sentiment data on Tuesday and the key Eurozone inflation figures on Friday, that's the next piece of major economic news that could alter the ECB's thinking on interest rates.


Technically, the overall movement remained bearish throughout the last couple of weeks. I expect the pair is likely to see more volatility going forward. On the weekly time frame, the euro is currently supported at 1.0900 and the resistance is around 1.1060. If the pair continues to fall this week, the key support level is 1.0920 and 1.0900/1.0870. On the upper side, in case the pair manages to settle again above 1.1040, it will gain strong upside momentum and head towards the next resistance level at 1.1110 and 1.1140.


Dow Jones remains undecided as to which way its next directional break will be. Dow traded with a bearish tone throughout the last week after Moody’s recent downgrade of several US banks curbed the enthusiasm for riskier investments. Meanwhile, it recovered part of its loss on Friday boosted by higher energy prices and the US headline inflation reading for July that showed a moderate increase. For Dow, the main attraction for this week is the US retail sales data and Wal-Mart earnings report.


For this week, 35,180 is the immediate support level, followed by 35,000. If the index breaks below 35,000, the slump will quickly extend toward the 34,850 and 34,600 marks. On the upper side, the Dow is likely to find immediate resistance at 35,450, any break above the 35,450 level could lead the prices of the index towards the next resistance levels of 35,600 and 35,680.

Read more - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-91
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