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.
Risk-off is back. All eyes on the US data.
The market sentiment deteriorated as the USA and some other countries are suffering from the new virus resurgence. Investors worry that the economic reopening may be delayed.
- Australia has recorded its largest peak in COVID-19 cases since April. The US states such as Florida and California exceeded daily highs.
- Investors are concerned that governments may impose strict restrictions and lockdowns again. That may lead to devastating results for most businesses. Stocks dropped on that worries.
- Margie Patel, portfolio manager at Wells Fargo Asset Management, said that stocks just need to take a breath and then they may continue rallying.
- The USA revealed new tariffs on export goods from the Eurozone. The EU considers to ban the entry for Americans. The US-EU tensions began to heat up.
- The IMF lowered its guidelines for the global economic recovery and predict deeper downturn and slower rebound.
S&P 500 dropped dramatically, but the 200-day moving average stopped it at the 3,020 level. If it manages to cross this line, it will open doors towards the key psychological mark at 3,000. Follow the release of the US GDP and unemployment claims at 15:30 MT time. It will be the strong catalyst for the further falling, if the data comes worse than expected. Otherwise, if the market catches the risk-on stimulus after the report, stocks may soar. In this case, look for resistance levels at 3,110 and 3,225.
Gold is headed to new highs. Market participants found it the most attractive safe-haven asset amid the current uncertainty. The US dollar gains too, but gold still prevails. If it crosses the resistance at 1,775, it will surge to 1,800. Support levels are 1,717 and 1,700. Again, the US data will have a huge impact on gold. Don’t miss out.
AUD/USD has tumbled significantly as Australia suffers from the largest high in coronavirus cases. Look for the break below the 0.6830 level, as the pair may fall even deeper to the next support at 0.6800. Resistance lines are the 50-day moving average at 0.6890 and the high of June 23 at 0.6920.
The US GDP and unemployment claims at 15:30 MT time will make the market really volatile. Follow the report!
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.
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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.