Commodities, precious metals and US stock indexes ended mixed last week after several Federal Reserve officials flagged the likelihood of continued aggressive monetary tightening despite the soft inflation signals.
Moving ahead, this week the trading will be thinned out for the last two days and liquidity is expected to remain low as US financial markets are closed on Thursday and a half-day on Friday for the Thanksgiving holiday. The main event on the calendar for monetary policy this week is the meeting of the Reserve Bank of New Zealand on Wednesday. On the other hand, one of the other important events for this week will be the FOMC meeting minutes, which will be released on Wednesday and we could expect to hear comments from the FED policymakers throughout this week.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Dell, Zoom, Best Buy and Dollar Tree.
The precious metal extends its decline on Monday morning and the overall sentiment lacked any clear direction since the mid of last week. However, the overall momentum remained bullish throughout this month after the latest data showed that US inflation cooled off a bit in October, lifting hopes that the Federal Reserve would adopt a less aggressive approach to rate hikes. This week, the main drivers for the precious metal remain the comments from the FED policymakers and the movement of the US dollar.
Technically the current price action signals suggest that a short-term bearish trend remains intact. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1732 and $1726 if the bearish momentum continues. On the flip side, the metal needs to stay above $1760 to have a chance to develop upside momentum in the near term. If the metal breaks and closes above $1760, the next upside level to watch is $1774 then $1780.
The greenback started the new week on a positive note supported by hawkish comments from Federal Reserve officials had fuelled bets that US central bank is still far from pausing its rate-hiking cycle. This week, traders and investors should pay attention to an important event for the USD this week, the FOMC meeting minutes on Wednesday.
For this week, 107 is the immediate support level, followed by 106.80. If the pair breaks below 106.80, the slump will quickly extend toward the 106.40/20 levels. On the upper side, USD is likely to find immediate resistance at 107.80, any break above the 107.80/90 level could lead the prices of the dollar towards the next resistance level of 108.50.
The currency pair started the week with considerable losses. A hotter-than-expected inflation report in the Eurozone brought pressure on the currency pair by the end of the week and ended slightly lower on Friday. For Euro, the main attraction for this week is the latest PMI data from the German and Eurozone.
Technically the overall momentum remained mixed for the pair after the bulls failed to extend the rally. For this week, 1.0200 is the immediate support level, followed by 1.0180. If the pair breaks below 1.0180, the slump will quickly extend toward the 1.0130/00 mark. On the upper side, in case the pair manages to settle above 1.0300, it will gain upside momentum and head towards the next resistance level at 1.0350 and 1.0400.
Major stock indices and Dow jones struggled to regain momentum last week as the global trend as the risk-off mood dominates. Meanwhile, a busy Q3 earnings season is largely over while there are few earnings of broad significance due this week. This week, the FED minutes from its October meeting will likely have a significant effect on the Dow Jones and other US indices because the minutes will hold more clues on the pace and size of future rate hikes.
The technical picture looks weak after the index formed a double top near 34,000. For this week, 33,100/000 will act as an initial cushion, any break below this area will open doors to 32,600/400. On the flip side, the bullish breakout of 34,000 is likely to push the Dow into a new trading zone, which may offer further buying opportunities until 34,500/600.
Trading is risky and your entire investment may be at risk. Please ensure that you fully understand the risks involved.