The U.S. dollar dropped to the lowest level in two months against a basket of the other major currencies on Monday, on growing concerns that the multilateral trade regime will see sharp changes under Trump from a proposed border tax to potential other actions on import tariffs.
Trump addressed U.S. manufacturing executives with a repeated promise to impose a border tax on firms that import products into the United States after moving American factories overseas and announced the country had abandoned the Trans-Pacific Partnership trade pact among a dozen nations. Trump also said Sunday he would start talks with Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA).
The safe-haven yen has been the main beneficiary of U.S. political uncertainty, rising for a second straight session against the dollar.
Sterling, meanwhile, was the other big gainer, hitting a six-week peak as investors bet Britain's Supreme Court would rule on Tuesday that the government needs parliamentary approval to trigger formal Brexit talks.
For this week ahead, Trump's policy plans in his first days in office are likely to attract investor’s focus and dominate headlines. Investors will also looking at fourth quarter growth data from the U.S. on Friday and from the U.K. a day earlier. Tuesday’s data on euro area private sector activity will also be closely watched.
The euro gained against the dollar on Monday, posting a 0.40% rise to 1.0746. The dollar dropped on Monday on growing concerns that the multilateral trade regime will see sharp changes under President Donald Trump from a proposed border tax to potential other actions on import tariffs.
Trump’s remarks also included halting off-shoring of work, something that raises concerns of a trade war with leading manufacturing exporters such as China.
Today, the euro zone is to release data on private sector business activity while later in the day, the U.S. is to report on existing home sales.
Pivot: 1.072Support: 1.072 1.069 1.0665Resistance: 1.0775 1.08 1.0835Scenario 1: Long positions above 1.0720 with targets at 1.0775 & 1.0800 in extension.Scenario 2: below 1.0720 look for further downside with 1.0690 & 1.0665 as targets.Comment: the RSI lacks downward momentum.
Gold
Gold ended higher on Monday, supported by a weaker dollar amid risk concerns connected to President Donald Trump moving to a new set of policies on global trade, including a proposed border tax on imports.
Trump addressed U.S. manufacturing executives with a repeated promise to impose a border tax on firms that import products into the United States after moving American factories overseas and announced the country had abandoned the Trans-Pacific Partnership trade pact.
In the week ahead, the economic calendar is light but Trump's policy plans in his first days in office are likely to dominate headlines. Investors will also be waiting for a first look at fourth quarter growth from the U.S.
Pivot: 1213Support: 1213 1209 1206.5Resistance: 1223 1226.5 1233Scenario 1: long positions above 1213.00 with targets at 1223.00 & 1226.50 in extension.Scenario 2: below 1213.00 look for further downside with 1209.00 & 1206.50 as targets.Comment: the RSI is negative but supported by a strong support.
WTI Oil
Higher production by U.S. shale drillers and other producer countries added pressure on crude prices in the U.S. with Brent and West Texas Intermediate settling lower despite efforts to cut global output by almost 1.8 million barrels per day (bpd) by OPEC and non-OPEC countries.
Data released on Friday showed U.S. drillers added 29 rigs, the most in almost four years by the end of the previous week, taking the total count up to 551, the most since November 2015, according to Baker Hughes.
Nontheless, despite demand usually being lower in the first quarter in winter, the actions taken by OPEC and other countries has impacted the market in a tangible way that is expected to be seen in prices.
For today, inventory data from the API will be in focus
Pivot: 52.64Support: 52.64 52.35 52.15Resistance: 53.35 53.65 53.82Scenario 1: long positions above 52.64 with targets at 53.35 & 53.65 in extension.Scenario 2: below 52.64 look for further downside with 52.35 & 52.15 as targets.Comment: the RSI is above its neutrality area at 50%.
US 500
U.S. stocks edged lower on Monday as early moves by President Donald Trump highlighting a protectionist stance on trade gave investors cause to rethink the post-election rally.
In his latest executive order, Trump signed to formally withdraw the United States from the 12-nation Trans-Pacific partnership trade deal. Trump has also vowed to renegotiate the North American Free Trade Agreement (NAFTA) with leaders of Canada and Mexico.
The Dow Jones Industrial Average fell 0.14 percent, the S&P 500 lost 0.27 percent, and the Nasdaq Composite dropped 0.04 percent. Energy stocks fell 1.1 percent and were the worst performing of the 11 major S&P sectors, as oil prices eased on signs of a strong recovery in U.S. drilling.
In the week ahead, the economic calendar is light but Trump's policy plans in his first days in office are likely to dominate headlines. Investors will also be waiting for a first look at fourth quarter growth from the U.S.
Pivot: 2267 Support: 2267 2273 2277 Resistance: 2253 2249 2240 Scenario 1: short positions below 2267.00 with targets at 2253.00 & 2249.00 in extension. Scenario 2: above 2267.00 look for further upside with 2273.00 & 2277.00 as targets. Comment: the RSI lacks upward momentum.