Precious metals started the new of trading on a bullish note while US stock futures opened mixed on Monday following the Thanksgiving break. Moving ahead, this week is filled with important economic releases. The volatility is expected to remain high this week, based on a list of important data and events. The ISM manufacturing PMI and the Core Personal Consumption Expenditures (PCE) Price Index may be the most market-moving events on the calendar this week. The other key events include the RBNZ Interest Rate Decision, the OPEC meeting and the series of inflation numbers from Germany and the Eurozone.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Snowflake, Salesforce, Okta and CrowdStrike.
Gold price extended its recent run and hit a fresh 6-month high supported by falling US Treasuries, weaker U.S. dollar and expectations that the Federal Reserve (Fed) will not raise interest rates further. This week, again the movement of the US dollar and the comments from the FED policymakers is likely to significantly affect the precious metal. On the other hand, this week is littered with key U.S. economic figures and any market disappointment over the outcome will also potentially support the gold price.
After spending a week battling major overhead resistance, the metal stays above $2010. This week the next immediate resistance level for the metal is $2018, then the stronger resistance is $2032, which is important to be stable above it for a continuing rise to $2045/50 levels. On the downside, if the metal loses the $2000 handles, we expect a short-term pullback to $1985 again. And if we go back below the $1985 support level, then all bullish bets would be off again for the short term.
The dollar index, which tracks the currency against key rivals extends the losses and pointed to a negative start to a new week. It has been a tough month for the U.S. dollar. The greenback lost value against all of the major currencies this month, it seems to me that long dollar positions are being liquidated and short positions have been established in recent weeks. The US PCE inflation numbers will set the tone for the king dollar this week, as it will offer fresh cues on the Fed’s next policy move and any speakers from the Fed will also be closely watched.
Technically the overall momentum remains bearish and the initial bias remains negative for the upcoming week. On the downside, the immediate support will be the same as last week's low near 103.20, below which the slide could further get extended towards 102.80. On the upper side, a close above 103.60 is now needed to ease bearish pressure while bulls need to see a close above 104 to shift focus back to the 104.50/60 region.
The euro gained upward traction at the start of the week against the US dollar. At the time of writing, the EUR/USD trades above 1.0950 area. Some of the key factors the Euro traders should monitor this week are the German retail sales and the latest consumer inflation figures from Germany and the Eurozone. The euro trader's focus will also turn to ECB President Christine Lagarde’s speech on Monday's NY session, which should prompt even more volatility.
For this week, considering the positive upside momentum there are chances the currency pair can rally back to above the psycological resistance of 1.1000. The breakout of 1.1000 will likely push the euro into a new trading zone, which may offer further buying opportunities until 1.1030 and then 1.1080. On the downside, immediate support is expected at the 1.0890 area, while further down, demand is also expected around 1.0850 (the previous week's low), which will act as the next area of support.
Dow futures took a pause and opened slightly lower on Monday after four consecutive positive weeks on Wall Street. The recent strong rally was fueled by increasing speculation that the Federal Reserve has concluded its interest rate hikes. This week investors are likely to return their focus to fundamentals with the US consumer confidence, GDP, PCE inflation and ISM manufacturing PMI figures.
From a technical perspective, the Dow holds a positive bias according to indicators on the daily chart. On the upside, the 35,500 area is immediate resistance to overcome, followed by July highs at 35,700. On the other hand, support levels are seen at 35,200 and 35,060, respectively, followed by the 35,000 psychological mark.
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