Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
Daily News: the USD fell
- The US dollar index has been suffering for the second day. On Monday, the risk sentiment improved because of the progress in the Brexit deal. As a result, even the news that the US House Republicans released a plan for the second round of tax cuts couldn’t support the USD. Tax cutting is a positive sign for the USD, however, this time it didn’t help the USD and it tested levels below the psychological level at 95. No important economic data will be released today. As a result, there are risks of the further fall. The next support lies at 94.40 (100-day MA).
- A progress in the Brexit deal pulled the euro and the pound up.
On Monday, the European Union's chief Brexit negotiator, Michel Barnier, said that the agreement between the parties may be reached in 6-8 weeks. Moreover, there are talks that the parties will hold an additional meeting on November 13. Before that, we anticipate a summit on September 19-20 and October 18-19.
As a result, on Monday, EUR/USD closed above 1.1582 (the pivot point). And up to now, it has tested the next resistance at 1.1632. If the USD weakens further, the pair will be able to break above the resistance. The next one is at 1.1711. In case of the USD’s recovery, the pair will stay below 1.1632.
The pound has recovered as well. GBP/USD has broken above 1.3033. The average earnings index data (11:30 MT time) will determine the further direction of the GBP. If the actual data is greater than the forecast. The pair will go further up. The next resistance is at 1.3151. The recovery of the USD will pull the pair back to 1.3033.
- Although the USD has plunged, it's still stronger than the JPY. The USD dollar has significantly risen against the Japanese yen. USD/JPY is trading above 111.50. The next resistance is at 111.78.
- NAFTA talks will be resumed today. Let’s see if there is any progress.
Goldman Sachs predicts a higher EUR and GBP, but lower JPY.
In 3 months:
EUR/USD at 1.17, GBP/USD at 1.30, and USD/JPY at 108.
In 6 months:
EUR/USD at 1.20, GBP/USD at 1.33, and USD/JPY at 112.
In 12 months:
EUR/USD at 1.25, GBP/USD at 1.39, and USD/JPY at 115.
- The oil market is climbing because of the speculations about a giant hurricane that is anticipated to approach the US East Coast and disrupt supplies. If it happens, oil prices will go higher.
Up to now, WTI has been moving to $68. The resistance is at $68.15. In case of the news of the further decline of the supply, the price will be able to break above this level. The next resistance is at $69. In case, of the market reversal, the support will lie at $67.35. The next one is at $66.35.
Brent has been moving up as well. The first resistance is at $78.50. In case of positive news for oil prices, Brent will go up. Otherwise, there are risks of the fall. The support is at $77.
That’s all for today! Follow market news with FBS!
The volatility that the markets experienced last week promises the second tidal wave! What should your favorite assets anticipate during the first week of February?
The US will reveal Non-farm payrolls on January 7, Friday, at 15:30 GMT+2 (MetaTrader time).
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on May 27 at 15:30 GMT+3.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.