Global markets ended last week lower as investors worried about signs of slowing global growth, rising inflation, the prospects for a more aggressive move by major central banks and signs of a global recession are growing by the day.

This week Central Banks completely dominate markets with the FED, BOE and BOJ all conducting meetings. The key focus, however, will remain on the most anticipated Federal Reserve’s interest rate decision and statement. The Federal Reserve will begin a two-day meeting on Tuesday with expectations mounting that they will lift rates by at least 0.75%.

On the earnings front, the companies scheduled to release their last quarter financial results this week will be Costco, KB Home and H.B. Fuller. 

GOLD

The precious metal plunged to a fresh 2-year low of $1654 last week after the latest stronger US consumer inflation figures lifted bets that the Federal Reserve will get more aggressive to cool price pressures. The metal has already been in a downtrend for the past few months. Aggressive Fed rate hike bets and relentless USD buying continued weighing heavily on the commodity.

For this week, technically the current price action signals suggest that the bearish trend remains intact. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1650 and $1640 if the bearish momentum continues. On the upper side, $1683/90 is the key resistance zones to watch, if the pair breaks and close above this area then the next resistance level to watch is around $1700/05.

DOLLAR INDEX

The dollar index rallied and remained in demand last week as investors positioned ahead of the FED meeting. The upside momentum was also largely fueled by the hotter-than-expected US CPI data. The FED decision is the key release this week for Dollar. However, traders will also be watching the latest US PMI data which is set to be released on Friday.

Technically, the overall movement has remained bullish so far during the last week. This week, if the bullish momentum continues the next upside levels to watch 110/110.30 then 110.80. On the downside, any meaningful pullback now seems to find some support near the 109.20 zones, below which the slide could extend further towards the 108.80/30 regions.

EURUSD

EURUSD ended mixed last week as investors largely stayed cautious and refrained from making significant moves ahead of the FED meeting. Technically, the short-term trend remains supportive and the pair has room to climb as it flirts near the partity level while If the US dollar regains further upside strength this week, we could see an extension to the weakness in the euro. This week the main drivers for the currency pair remain the movement of the US dollar.

This week, the first resistance is located around 1.0090 then 1.0200, a break above 1.0200 will confirm a possible move to 1.0280 and 1.0340. On the downside, the first nearest support level is located at 0.9930. In case it breaks below this level, it will head towards the next support level which is located at near 0.9900 then 0.9860/40. In the long term, watch for weekly closing above 1.0280 or below 0.9900 area, that will give a larger confirmation of direction in the long term.

DOW JONES

Dow Jones collapses below the psychological level of 31,000 last week amid reports that the US Federal Reserve could raise interest rates by as much as 0.75% this week following the release of strong US inflation data. On the other hand, the bearish sentiment was also driven by FedEx CEO’s warning of a worldwide recession. FedEx’s stock plunged more than 21% after the company reported a major slump in global shipping volumes and withdrew its full-year guidance.

For this week, the first nearest support level is located at 30,400. In case it breaks below this level, it will head towards the next support level which is located at near 30,150/00. On the upper side, If the index regains upside momentum and press back above 31,300 then the key resistance area to watch is 31,600 and 32,000.

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