Moving ahead this week, markets are expected to be volatile, with investors closely watching economic data and global events. The main highlights of the economic calendar will be the US jobs report, ECB minutes, ISM manufacturing, Eurozone inflation and the US consumer confidence data. The most important thing in the market this week is undoubtedly the announcement of Friday’s US employment report.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Okta, Chewy, CrowdStrike, Salesforce, Dell, HP and Lululemon.
The precious metal failed to extend the upside momentum and ended slightly lower after Fed's Powell took a hawkish tone at Jackson Hole. Powell said inflation remains "too high": "We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective." However, the metal staged a decent recovery during the first half of last week due to its status as a safe haven asset. This week is littered with key U.S. economic figures and any market disappointment over the outcome of them could potentially support the gold.
Technically, the overall momentum remains mixed. In the short term, if the metal breaks below $1900 again it would open doors toward the next key support area of $1892/90 is next. On the upper side, $1920 will act as an immediate while $1924 will be a critical resistance zone. If the metal manages to settle above $1924, it will gain upside momentum and head towards the next resistance level at $1932 then $1940.
The US dollar, which is also often seen as the ultimate safe-haven currency, held firm against many other rivals. The dollar received strong upside momentum on Friday after Powell's hawkish speech at the Jackson Hole summit. The volatility remains high this week as well, based on a list of essential data and events. Some of the key data points expected to dictate this week's dollar movements include the US PCE inflation data, which is due out on Thursday and US NFP data on Friday.
Technically, the medium-term trend is very supportive. On the upper side, considering heavy volatility there are chances that DXY can easily rise towards the next key resistance of 104.70 On the downside, any meaningful pullback now seems to find some support near the 103.90 and then 103.70 zones, below which the slide could further get extended towards the 103.50/40 zones.
EURUSD starts the week with a somewhat upbeat tone. The currency pair rebounded back to above 1.0810 but it is far too early to suggest the euro-dominant downtrend is over. On Friday, European Central Bank President Christine Lagarde said at the Jackson Hole Summit that interest rates in the European Union will have to stay high as long as necessary. For euro this week all eyes will be on the Eurozone and German inflation data, which could reinforce expectations of a bigger rate hike next month.
For this week, the immediate support prevails at 1.0760/50, a further breakout of 1.0750 can lead the pair towards the 1.0700 level. On the upper side, a hurdle can be noted near 1.0860 then the key resistance zone of 1.0900. A break and daily closing above the 1.0900 level shall trigger renewed buying interest, validating a rally towards the 1.1000 psycological resistance zone.
Dow futures extended from Friday’s gains and started with a positive bullish note on Monday. However, the overall momentum remains mixed as the US rate hike worries still weigh on the markets. This week, Dow traders and investors should closely monitor the release of the latest US PCE and NFP numbers, looking for clues on future rate hikes by the Federal Reserve.
From a technical perspective, The 34,000 area of confluence has recently been held as a firm support, failure to defend the mentioned support levels has the potential to drag the index further towards the 33,750 and 33,600 support zones. 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 34,950/35,000.
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