The unexpected decline in US factory output after the release of forex news yesterday and worse than expected New York manufacturing have increased the possibility of longer term of accommodative policies and resultantly, Dollar has weakened.
US Dollar-Index (97.70) is stuck in the range of 97.30-98.20 for the last 5 sessions. The highly overbought condition suggests fatigue at the higher levels and a break below 97.30 may trigger a decline to 97.00-96.50 levels.
Pound (1.2223) is trying to rise towards 1.23-25 as expected with the broader range of 1.21-1.25 taking shape, which may continue for the next few days.
Aussie (0.7666) is getting closer to the major resistance of 0.77 and now it remains to be seen if the currency manages a break above 0.77 and rally higher towards 0.78. Equal chances of 0.77 holding and breaking higher.
Euro (1.1017) is seeing a small bounce but the price action around the resistance of 1.1050 has to be watched to assess the chances of an extension higher. If Euro fails to rise and sustain above 1.1050, then the recent lows around 1.0950 can be revisited.
Dollar-Yen (103.84) has corrected in line with our expectations but the chances of a last rise towards 104.80-105.00 before a major correction setting in can’t be ruled out yet. A break below 103.25 will be the bearish confirmation
Almost all the commodities have entered a sideways phase which may continue for the next couple of sessions.
Gold (1258.50) is seeing a collapse in volatility as it continues to trade in the previous week’s range of 1245-65 but as long as it trades below the resistance of 1275-80, the chances of further decline towards 1200 can’t be ruled out.
Silver (17.5870) is close to the 5-day high of 17.67 but may bounce higher to 17.80-18.00 in the next few sessions if Gold manages to test the higher levels of 1275-80. Major support remains unchanged at 17.25 and 17.00.
Brent (51.80) is in a sideways consolidation phase for the last few sessions in the range of 50.90-52.50. Equal chances of a decline to 50.00 and a rise to 53.50 make the picture unclear. No bias right now.
WTI (50.22) continues its contraction in the range of 49.00-51.00 as expected and this trendless phase may continue for another couple of sessions. Still, no bias just like Brent.
Copper (2.113) hasn’t moved much though it trades above the major support of 2.10. the chances of seeing 2.15 in the next few sessions are still open.