Currencies
EUR/USD – saw a strong rebound and reached the highest level in nearly a month amid a short squeeze. Again we see here that when the expectation is confirmed, we see the opposite happening, a typical buy the rumor sell the fact. However, we have the ECB meeting in 2 days which can cause the EUR to lose strength again, and the week thereafter the FED interest rate decision.
USD/JPY – tried to reach the 115 level again, but again was unable to reach this level. However, we remain trading within striking distance, so it is not too farfetched that we will reach it in the coming days.
GBP/USD – again we saw that the data out of the UK was better than expected, boosting the GBP further. It remains to be seen how far the GBP will be able to strengthen, as we are expecting an interest rate in the US, but obviously the developments of recent weeks are beneficial for the GBP. Another important development is the fact that the UK Supreme Court will start its hearings on whether evoking Article 50 requires Parliamentary approval or not.
Indices
Dollar Index – dropped below the support which is what able to find on the Fibonacci correction and dropped almost to the next one. The main reason the Dollar Index dropped was the fact that it lost a lot of ground versus the EUR.
Dow Jones – closed at a new record high as especially the financial sector continues to outperform.
XLF – this ETF is also continuing to move higher, which shouldn’t come as a surprise as the financial sector is doing very well ever since Trump won the elections.
Commodities
Gold – saw another test of the support around the 1162 level, and while it was breached intraday, it was able to close above this level. Even though the USD weakened quite a bit, we are not seeing a strong recovery in the price of gold.
Oil – was able to reach the highest level since July 2015, but was unable to hold on to those levels and ended the day where is started, which was down. We are seeing that production is increasing ahead of the announced cut, which really does question the resolve of countries. OPEC already reached a new record last month with a production of 34.2 mbpd and is expected to produce this month at the same level or higher and also Russia produced more. At the moment we have still been unable to close above the resistance.