The dollar fell lower against most major currencies on Monday, while sterling was sharply lower as fears over prospects for a ‘hard Brexit’ weighed.
Demand for the dollar continued to be supported after Friday’s U.S. nonfarm payrolls report for December, which showed a slowdown in hiring but the fastest wage growth in over seven years. Boston Fed President Eric Rosengren on Monday called for the U.S. central bank to step up the pace of interest rate increases, warning that inflation could overshoot its target if it does not.
The selloff in sterling came after British Prime Minister Teresa May on Sunday said that the country would not be keeping "bits" of European Union membership.The remarks were seen as an indication that the UK won’t try to negotiate continued full access to the European single market when it leaves the EU.
For today, Canada is to publish figures on building permits while on Wednesday, U.S. President-elect Donald Trump is scheduled to hold his first post-election news conference, which investors will be watching for hints about the possible direction of economic policy. In the week ahead, investors will be looking ahead to U.S.
economic reports, particularly Friday’s retail sales figures for December. Investors will also be watching an appearance by Fed Chair Janet Yellen on Thursday and speeches by a handful of other Fed officials during the week.
The pound fell sharply against the dollar and the euro on Monday, pressured lower by fears over the prospects of a ‘hard Brexit’ following comments by British Prime Minister Theresa May on Sunday.
GBP/USD fell 1.12% to 1.2146, a level not seen since October 31. The selloff in sterling came after May said in a television interview broadcast on Sunday said that the country would not be keeping "bits" of European Union membership.
The remarks were seen as an indication that the UK won’t try to negotiate continued full access to the European single market when it leaves the EU.
Ahead in the week, Investors will mainly be focusing on Trump’s first post-election news conference on Wednesday, a speech by Janet Yellen on Thursday and the U.S. retail sales report on Friday.
Pivot: 1.218Support: 1.213 1.2075 1.2Resistance: 1.218 1.2215 1.225Scenario 1: short positions below 1.2180 with targets at 1.2130 & 1.2075 in extension.Scenario 2: above 1.2180 look for further upside with 1.2215 & 1.2250 as targets.Comment: the RSI is mixed to bearish.
Gold
Gold prices continue their recovery on Monday, after a 1.97% increase last week, its best weekly performance in two months, supported by weakness in the dollar.
Gold markets appear to be preparing for the Trump administration and its changes across a wide variety of government agencies and departments, and policy areas.
The precious metal posted a new monthly high early on Tuesday trading close to $1187 per ounce.
Ahead in the week, Investors will mainly be focusing on Trump’s first post-election news conference on Wednesday, a speech by Janet Yellen on Thursday and the U.S. retail sales report on Friday.
Pivot: 1179Support: 1179 1175 1170Resistance: 1193 1197 1201Scenario 1: long positions above 1179.00 with targets at 1193.00 & 1197.00 in extension.Scenario 2: below 1179.00 look for further downside with 1175.00 & 1170.00 as targets.Comment: the RSI is supported by a rising trend line.
WTI Oil
Oil prices posted sharp losses on Monday dropping by nearly 4%, after four weeks of gains in a row, due to skepticism over by signs that major crude producers will not adhere to their pledge to reduce output.
Record Iraqi crude exports in December and rising U.S. output appears to be undermining OPEC's efforts to curb a global supply glut.
Meanwhile, indications of increased drilling activity in the U.S. also add pressure on prices. According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 4 to 529, the tenth straight weekly rise and a level not seen in almost a year. In the week ahead, energy traders will be focusing on fresh weekly information on U.S. inventories of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Pivot: 52.25Support: 51.56 51.1 50.75Resistance: 52.25 52.87 53.3Scenario 1: short positions below 52.25 with targets at 51.56 & 51.10 in extension.Scenario 2: above 52.25 look for further upside with 52.87 & 53.30 as targets.Comment: the RSI broke below a bullish trend line.
US 500
Declines in energy and financial stocks added pressure on the S&P 500 on Monday and helped stall the Dow's course towards the 20,000 level ahead of earnings season and expected U.S. policy changes under the Donald Trump presidency.
The S&P's energy sector dropped 1.5 percent as oil prices fell on concerns that rising Iraqi exports and U.S. output could dampen the impact of a deal among major producers to limit output.
Big banks will provide the first peek into how U.S. companies fared in the fourth quarter later this week. S&P 500 companies overall are expected to post a 5.8 percent increase in profit in the quarter, according to Thomson Reuters In the week ahead, investors will be looking ahead to U.S. economic reports, particularly Friday’s retail sales figures for December.
Investors will also be watching an appearance by Fed Chair Janet Yellen on Thursday and speeches by a handful of other Fed officials during the week.
Pivot: 2270 Support: 2254 2250 2244 Resistance: 2270 2277 2289 Scenario 1: short positions below 2270.00 with targets at 2254.00 & 2250.00 in extension. Scenario 2: above 2270.00 look for further upside with 2277.00 & 2289.00 as targets. Comment: as long as 2270.00 is resistance, expect a return to 2254.00.