Weekly review: Gold, USD, EURUSD and Dow Jones


Last week global stock markets and commodities have been under pressure as investors remain concerned about the global economic outlook and uncertainty regarding the Fed’s future rate hike decisions also appeared to pressure market sentiment.

This week economic weakness in China and renewed Fed tightening concerns continue to hang over markets and the bulk of PMI data will be released on Wednesday. On the other hand, the other key event for the market this week Jackson Hole symposium. The event will take place on Thursday and Friday. Fed Chair Jerome Powell will speak on the "Economic Outlook" at the Jackson Hole Symposium on Friday.

On the earnings front, the companies scheduled to release their last quarter financial results this week will be Nvidia, Snowflake, Zoom, GAP and Macy’s.


The precious metal ended the last week on a bearish note, the past 3 weeks have been a tough time for gold buyers. The metal closed near the monthly lows on Friday and the metal remained volatile as the markets are unsettled by swings in volatility caused by hawkish FED minutes. Gold is sensitive to high interest rates which lift the opportunity cost of holding non-yielding bullion. For this week, gold investors and traders should closely monitor economic developments from China, the movement of the US dollar and the momentum of treasury yields.

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The technical scenario is absolutely bearish and attempts to exit the current bearish channel will not succeed without moving above the 1910 resistance so far. On the downside, the 1880 area remains supportive If the US dollar extends further upside strength, we could see an extension to the weakness in the precious metal towards 1870/65. On the flip side, in the short-term 1900 now seems to act as an immediate resistance, which, if cleared, might trigger a short-covering bounce to 1910/12.


Last week the US dollar remained in favour as a safe haven currency among traders around the world after the US central bank signalled more interest rate rises could be on the horizon. Dollar received a further boost following the stronger-than-expected US macro-economic data including weekly jobless claims and Philly Fed index. This week the USD investors and traders should closely watch the FED Powell comments from the Jackson Hole Economic Symposium scheduled for Friday and the US durable goods orders report.


Considering the strong bullish momentum, last two trading sessions we witnessed the dollar index shy to break above the upper trendline. The move above the trendline will drive the USD up to the next upside levels to watch 103.70(the previous week's high) and 104. On the downside, any meaningful pullback now seems to find some support near the 103 zones, below which the slide could further get extended towards the 102.80/70 region.


EURUSD bears are firmly in control. On the macro side, US Dollar strength and hawkish signals from US Federal Reserve officials were the main bearish factors impacting the Euro. The currency pair has been moving lower since mid-July, largely due to a broad strengthening in the US dollar. This week, ECB President Christine Lagarde comments, that the movement of the US dollar and the latest PMI numbers from Germany and the Eurozone is likely to significantly affect the currency pair.


Technically the current price action signals suggest that the short-term bearish trend remains intact. The currency pair needs to stay above 1.0910 to have a chance to develop upside momentum in the near term. If the price breaks and closes above 1.0910, the next upside level to watch is 1.0940 and 1.0970. On the downside, 1.0830 will act as an initial cushion, in case it breaks below this level, it will head towards the next support level which is located near 1.0800 then the critical zone near 1.0770.


Dow futures started the new slightly positive after the index experienced a sharp decline last week. The Federal Reserve's hawkish remarks contributed to the negative sentiment on Wall Street. Fundamentally the Dow is expected to be extra volatile from Wednesday onwards due to a busy economic calendar. Investors should also close pay attention this week to corporate earnings with some of the biggest companies reporting their earnings. Nvidia, Zoom and Snowflake are amongst those reporting the last quarter's financial results this week.


Dow futures are clawing back some of the previous week's losses. On the downside, the immediate support will be the same as last week's low of 34,260, below which the slide could further get extended towards 34,000 and 34,800. On the flip side, the Dow needs to recover back to above 35,000 to have a chance to develop upside momentum in the near term. If the Dow breaks and closes above 35,000, the next upside level to watch is 35,350/400.

Read more here - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-92