Global equity markets settled higher last week after cooling inflation reports raised hopes of an end to interest rate hikes. US inflation was softer than expected in October. Headline CPI eased to 3.2% in October, down from 3.7% in September and August and lower than the market consensus of 3.3%. Inflation in the euro area fell to 2.9% in October, approaching the European Central Bank (ECB) target rate of 2%.
Moving ahead, with a shorter week with the market being closed on Thursday and a half-day on Friday for Thanksgiving. However, before the Thanksgiving holidays, some intriguing US data is scheduled to be published. Minutes from the latest November 1 FOMC meeting will be released on Tuesday. The minutes are expected to provide a more detailed look into the Fed’s decision to hold rates and any hints about the interest rate cuts. Several market participants anticipate that the officials will commence cutting rates before June next year.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Nvidia, Zoom, HP and Lowe’s.
Gold price traded with a strong bullish tone for the entire last week, with some downside momentum seen only on Friday after the precious metal failed to break above the psychological level of $2000. The move above the psychological mark will drive the metal up to the new upside levels. On Thursday, the yellow metal received a further boost following the weaker-than-expected US weekly jobless claims numbers. The number of Americans filing for unemployment benefit claims increased to a three-month high last week. This week gold traders and investors should closely monitor the US FOMC minutes and Durable goods orders figures to get a clear picture of the metal's long-term direction.
This week, if the metal stays above 1960, then the next short-term resistance is located in the area of 1995, a break above 1995 will confirm a possible move to 2010/14. On the other hand, if the USD rebounds after the FED minutes and the Gold buyers fail to keep the upside momentum the metal is expected to retreat lower to $1965/60.
The US dollar index which measures the greenback against major peers traded with a strong bearish momentum throughout the last week after the US CPI data revealed that inflation cooled by more than anticipated in October. For this week, traders and investors will also pay attention to the important data for the USD this week, U.S. Federal Reserve's minutes of the latest meeting on Tuesday and US Durable goods orders report is due Wednesday.
The greenback daily chart is still biased to the downside and still possible we will get further downside as the chart has downward pressure. If the bearish momentum continues bears will probably try to achieve the next key support at 103.20 and 103. On the upper side, the immediate resistance is located for the index around 104, a break above this level will confirm a possible move to 104.30/40.
EURUSD trades with strong monthly gains at the beginning of the brand-new week. Moving ahead, the euro should extend its gains against the US dollar as recent data reinforced bets that the Federal Reserve has reached the end of its tightening cycle. The ECB meeting minutes are the key release this week for Euro. The Euro traders will also be watching the latest HCOB PMI data from the eurozone and Germany which is set to be released on Thursday.
Technically, the medium-term trend is very supportive, and the currency pair has room to climb If the upside momentum continues. This week, key resistance is located for the pair around 1.0970, a break above this level will confirm a possible move to 1.1010/20. On the downside, any meaningful pullback now seems to find some support near the 1.0890 and then 1.0860 zones.
Dow Jones started the new week slightly lower and the initial bias remains neutral for the upcoming week due to the holiday-shortened week. During the last week, Dow futures and other major US indices ended the third straight week of gains, boosted by strong U.S. inflation data and expectations that the Federal Reserve (Fed) is done with its rate hike cycle. This week, the FED minutes will likely have a significant effect on the Dow Jones. On the other hand, tech giant Nvidia is set to report quarterly results, and investors will be hoping the earnings can help boost the markets.
For this week, the first nearest support area is located at 34,800/770. In case it breaks below this zone, it will head towards the next support level which is located near 34,400. However, a fresh demand for the Dow can be anticipated once the index rises above 35,100 (the previous week's high. A break above this level will confirm a possible move to 35,450/500.
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