Currencies
EUR/USD – after a very long period in which the EUR weakened every single day versus the USD, yesterday was the first time we saw the EUR strengthen again the USD. This comes in part because a correction in the USD was overdue, but also the news that German Chancellor Merkel will run for another term. It appears though, that any uptick in the EUR is an interesting point to enter the market, unless we will really see a change in sentiment.
USD/JPY – managed to trade above the resistance for a while, but in the end closed below this level. The reports of a strong earthquake of the Japanese coast also helped strengthen the JPY a bit due to a run to safe havens, but this didn’t last long, as it appears there was no major damage. As a result we are likely to see another attempt to conquer this level as well.
GBP/USD – regained all that was lost last week in a single day as the USD finally gave up some of its gains. There is only data out of the US the coming days, but that will change on Friday when we get GDP data out of the UK.
USD/MXN – we can see that the technical are still working very well here, with support and resistance at the moment being found at the Fibonacci levels.
Indices
Dollar Index – traded down for the first time in a long while, but remains well above the 100 level.
S&P 500 – there we have it, also a record high in the S&P and trading above the 2200 level, helped by a rising energy sector which rallied as oil prices moved up. In addition, the expectation that there will be more economic stimulus in the US is also doing its part. We have seen quite a roller-coaster ride since election night in the US, climbing 170 points.
Commodities
Gold – moved further away from the support and is now approaching the resistance. The main question with gold is, has gold already adjusted to the fact that the FED will raise the interest rate next month? If so, then these levels could prove to be an excellent entry point based on the support levels. In case that is not the case, we can expect gold to drop quickly below the 1200 level and move to test the next support levels around 1180. That of course in case nothing unexpected happens.
Oil – moved firmly up yesterday as more positive comments came out of the OPEC meetings. They reported progress and optimism on the chances a deal would be reach next week. However if an agreement is reached it will be a positive sign for oil, however, the crux as always is in the details and most importantly on the implementation.
We must also take into consideration that the plans of President Elect Trump are to increase production in the US, so that should in turn cause for production in the US to increase.