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Weekly review: Gold, USD, EURUSD and Dow Jones

“Dangers of watching every tick are twofold: overtrading and increased chances of prematurely liquidating good positions” – Jack Schwager.

Weekly review: Gold, USD, EURUSD and Dow Jones

Global markets ended mixed last week due to the latest FED meeting minutes indicating that the central bank could tighten monetary policy more aggressively than anticipated and the rapid spread of the coronavirus Omicron variant. The Omicron Covid-19 variant maybe 105 per cent more transmissible than Delta, according to a research by French scientists.

This week the coronavirus fears will dominate the market sentiment once again. On the other hand, the inventors anxiously awaiting the latest US and China inflation numbers, which is set to be released on Wednesday.

On the earnings front, the companies due to release their results will be the banking giants JPMORGAN, CITI, WELLS FARGO and the airline stock DELTA AIRLINES will be among those reporting earnings this week.

GOLD

The precious metal continues its range-bound trading as it struggles to find momentum and any real direction. Meanwhile, the overall momentum remained bearish. On Friday, the metal slightly rebounded from the weekly lows after the USD gives back some of the gains. This week the main drivers for the precious metal remain the movement of the US dollar, US CPI and the rising omicron cases.

gold neww

In the short term, if the metal break above $1800 which would open doors towards the next resistance area of $1806 and above that $1810/12 is next. On the downside, the immediate support is near $1780, and a further breakout below this area could lead the pair towards the next support level of $1772/65.

DOLLAR INDEX

The Greenback, in terms of the US Dollar Index (DXY), corrected lower this past week driven by the FOMC meeting minutes and weaker-than-expected US NFP figures. Moving ahead, the future direction of the USD will depend on the Inflation report which will release on Wednesday.

DXY

This week, DXY needs to stay above 96.40; otherwise. 95.50/20 may be visible soon. On the upper side, 96.40/50 the key resistance zones to watch, if the pair breaks and close above this area then the next resistance level to watch is around 96.90/97.10.

EURUSD

The currency pair closed above 1.1350 last week following the poor NFP data reported in the United States on Friday. The main attraction for the EURO this week, the Eurozone unemployment rate and ECB policymakers speech.

eurusd

The expected trading range for the pair this week is between 1.1220 support and 1.1460 resistance. This week, 1.1300 is the immediate support level, followed by the 1.1270 crucial support. If the pair breaks below the 1.1270, the slump will quickly extend toward the 1.1220 marks. On the other upper side, the immediate resistance at 1.1385 and any break above this will open the doors to 1.1400/30.

DOW JONES

Dow Jones ended the first week of 2022 in the negative territory driven by the comments from FED policymakers. The downticks in the index were further bolstered after the release of the weaker-than-expected US jobs report. Moving ahead, Dow is expected to remain under pressure this week by rising inflation and spreading the omicron variant virus as investors reduce their risk exposure.

cruse

Technically the overall momentum remained bearish for the Index after the bulls failed to extend the rally. In the short term, if the index breaks below 36,050 which would open doors towards 35,900 then 35,650. On the upper side, the first immediate resistance is around 36,550 and then 36,700.

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