The focus of the market this week will be the speech of the Federal Reserve chair Jerome Powell for cues on interest rate hikes and the state of the economy. Powell testifies before Congress on Tuesday and Wednesday. Anything suggesting more aggressive tightening, and thereby adding to fears over a global economic slowdown, is negative for risk appetite.
On the other hand, meetings of major central banks with RBA, BOC and BOJ on the horizon return this week. Investors will also be keeping an eye on the Eurozone GDP on Wednesday as well as the US nonfarm payroll data for February on Friday.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Crowdstrike, Gap and Oracle.
The precious metal started the month on a positive note and overall momentum remained bullish throughout last week. The medium-term trend remains supportive but If the US dollar regains further upside strength this week on the back of further talk about an aggressive interest rate hike, we could see an extension to the weakness in the precious metals. This week is littered with key U.S. economic figures and any market disappointment over the outcome of them could potentially support the gold.
On the bullish side, this week the resistance stays above 1865, and a break above this exposes the metal to the 1874 and 1882 levels. On the flip side, rejection and pullback from the 1865 resistance allow for a dip towards 1848 and with 1840 and 1835 forming additional downside targets.
The dollar index ended slightly lower on Friday as it struggles to find momentum after the mixed comments from FED policymakers. Overall, the pair have been coming under selling interest after hitting the latest ceiling of 105.30 and this has been the case since starting last week. This week, traders and investors should also pay attention that the February U.S. unemployment report is due Friday. The NFP expectations are for 200k jobs to have been added to the US economy in February.
The greenback remained in a range above 104 last week despite the retreat, and the initial bias remains neutral for the upcoming week. The key resistance is located for the index around 105.30, a break above this level will confirm a possible move to 105.80. On the downside, any meaningful pullback now seems to find some support near the 104.20/104 zones, below which the slide could further get extended towards the 103.70 and 103.40 regions.
Euro started the last week on a bullish note while the bulls failed to extend the rebound and the currency pair fell back to below 1.0600. Moving ahead to this week, there are no important economic reports scheduled to be released in Europe this week except the Eurozone GDP data. However, the US dollar movement will continue to play a vital role in this currency pair's future direction.
This week, the currency pair needs to stay above 1.0700 to have a chance to develop upside momentum in the near term. If the price break and closes above 1.0700, the next upside level to watch is 1.0750 then 1.0790. Nevertheless, if it continues to fall, the slump will quickly extend toward the 1.0560 and 1.0530 marks.
Dow Jones and other major US indices ended higher last week on hopes Fed will slow rates hikes. The upside momentum was boosted after Atlanta Fed President Raphael Bostic supported keeping rate increases at 25 basis point increments and said the central bank could be in a position to pause rate hikes sometime this summer. For the Dow, the main attraction for this week is FED chair Powell's speech and US NFP data, which could trigger volatility in the market.
From a technical perspective, The $33,000 area of confluence has recently been held as a firm support, failure to defend the mentioned support levels has the potential to drag the pair further towards the 32,500 support zone. On the upper side, in case the index manages to settle above 33,400, it will continue upside momentum and head towards the next resistance level at 33,650/800.
Trading is risky and your entire investment may be at risk. Please ensure that you fully understand the risks involved.