Dollar can strengthen again this week and the weakness of the major currencies can return.
The Dollar Index (98.71) is consolidating at the higher levels as expected. The uptrend will weaken only on a break below 98.30 and as of now, a new high around the resistance of 99.30-60 can’t be ruled out yet.
Euro (1.0899) has found rejection from the immediate resistance of 1.0950, keeping the chances of seeing 1.0820-1.0780 open in line with our expectations.
Dollar-Yen (104.42) has been stalling around the resistance of 105 for the last few sessions with increasing chances of a breakdown towards 103 in the near term.
Pound (1.2217) has strengthened a bit as expected but a lot more buying needed at the lower levels to push it higher towards 1.23-24. It has been slowly digesting the recent bad news without much price action which, if continues, can help it make a base.
Aussie (0.7627) has been sold off from 0.77 levels just as expected and it may visit 0.7550-00 in a day or two now.
Upcoming Economic News:
- EUR – Spanish Unemployment Rate
- EUR – M3 Money Supply y/y
- EUR – Private Loans y/y
- GBP – Prelim GDP q/q
- GBP – Index of Services 3m/3m
- GBP – CBI Realized Sales
- USD – Core Durable Goods Orders m/m
- USD – Unemployment Claims
- USD – Durable Goods Orders m/m
- USD – Pending Home Sales m/m
Gold (1275.16) is testing the upper end of the near term range of 1260-75 but the price action around the resistance of 1275-85 may determine the near price action. Considering the major trend is down, any bounce may be susceptible to sudden selling.
Silver (17.8222) is slowly rising but the near upside may be limited to 18.00 levels in the near term.
Russia is the latest country after Iraq in the last few days seeking an exemption to the OPEC output cuts, putting pressure to the oil price. Brent (50.21) and WTI (49.31) have corrected as expected last week but took more time than estimated. Brent has achieved our target of 50.30 and now it remains to be seen if the support around 50.00-49.90 holds or not. Below 49.90, the decline may extend to 48.00 levels.WTI, after achieving our target of 49.30, may decline further towards 48.00 or even 46.50-20 levels.
Copper (2.13) is rising as expected and may test 2.15 now. Only a break above 2.15 will bring higher levels of 2.20 into consideration.