Last week major central banks, including the Federal Reserve, the Bank of England, and the Swiss national bank continued their aggressive policies and stated that the economic outlook remained highly uncertain.
As we progressed through the last week of this month, global markets seem to be set for another week of panic. This week, the Central bankers will continue to be in focus with the US Federal Reserve and ECB's top officials set to deliver remarks. Thursday’s GDP report is expected to be the week’s most closely watched economic release along with the release of the PCE price index on Friday.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Nike, BBBY and Micron.
Gold price ended the week sharply lower after the U.S. Federal Reserve increased interest rates by another 75 basis points and flagged more hikes. Precious metals could continue to struggle as the strengthening US dollar continued to sap demand for greenback-priced bullion. For this week, gold investors and traders should closely monitor the comments from the FED policymakers for clues as to their outlook for interest rates.
For this week, $1620 remains the key support area to watch, any break below this level will open $1610/00 minimum. On the upper side, If the metal regains upside momentum and presses back above $1655 then the key resistance area to watch is $1665 then $1672/80.
The dollar index extended its recent run and surged above the 113 level for the first time since May 2002. The bullish rally was driven by worries about a slowing global economy and higher inflation. The strong upside move was also lifted after the Fed delivers another aggressive rate hike. The Federal Reserve leading the charge on interest rate hikes and the central bank is focused on bringing inflation down even if the US economy struggles.
Technically the overall momentum remains bullish throughout the last couple of weeks. This week, the key resistance is located above 114.80, a break above this level will confirm a possible move to 115.40/116. On the downside, any meaningful pullback now seems to find some support near the 112.80 zones, below which the slide could further get extended towards the 112 and 111.80/30 regions.
EURUSD was sold off heavily last week weighed down by the strong US dollar and fears that Europe will fall into recession. Moving ahead, any bounce back will be weak and succumb to selling pressure. The strong reversal will only come above 1.0000 levels. This week, the comments from the ECB policymakers and Eurozone inflation data on Friday are likely to significantly affect the currency pair.
Technically the current price action signals suggest that a long-term bearish trend remains intact. This week, the immediate support for the Euro stands near 0.9600 followed by 0.9550. On the flip side, the first resistance at 0.9800 any break above this level will open 0.9860/0.9930 minimum.
Dow Jones and other US indices extended their slide after U.S. Federal Reserve Chairman Jerome Powell hinted at a more aggressive tightening of monetary policy than previously anticipated. For Dow this week, important economic news to watch includes US Consumer Confidence Index and new home sales on Tuesday, durable goods orders on Wednesday, Q2 GDP report and weekly unemployment claims on Thursday, and personal income and spending on Friday.
Technically the overall sentiment remains bearish. However, a fresh demand for Dow can be anticipated once the pair rises above the 30,0000 key level. In this case, the pair could re-test hourly 200-SMA located near the 30,800 level. On the other hand, the next immediate support prevails at 29,200, further breakout of 29,200 can lead the index towards 29,000 and 28,600 levels.
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