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The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
Let’s look at fundamentals, which may lead to the current situation on the market. Yesterday the US ISM Non-Manufacturing PMI came out 58.1, 1 point higher than the June report and also better than the expected 55.0.
The US ADP Non-Farm Employment rose only by 167 000, while analysts predicted 1.2 million. As a result, most investors foresee that NFP may be worse than the forecasts tomorrow. Gold is gaining on those expectations. It has just crossed the key resistance at $2 050. It will meet the next barrier at $2 100. Support levels are at $2 030 and $2 000.
There is some positive news on vaccine. The leading medical expert Anthony Fauci claimed that the US will have tens of millions of vaccine doses by the end of the year. Therefore, stocks surged.
The S&P 500 has approached the high of January 23 at 3 325. If it breaks it through, it may surge to the all-time high at 3 390. Otherwise, if the price changes its direction, it will meet the support at 3 270 and then at the low of July 28 at 3 210.
The US crude oil inventories contracted by 7.4 million barrels during the last week, beating all estimates. Oil prices went upward.
The WTI oil has got closer to the 200-day moving average. If it manages to cross it, it will surge to 43.50. The next resistance will be at high of March 2 at $47.50. Support levels are at the 50-day moving average at $39.50 and at $38.00.
The Bank of England left rates unchanged as expected. Moreover, the central bank increased its growth forecasts. The overall optimistic message pushed the British pound upward.
If GBP/USD manages to cross the 100.0% Fibonacci retracement level, it may jump to the high of December 13 of the last year at 1.3325. Otherwise, if it reverses from it, it will meet the support at the recent low at 1.3050.
Follow US unemployment claims report today at 15:30 MT time!
The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
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