Currencies
EUR/USD – was able to find support at the levels of December 2015 and is currently moving away from this level, thanks to a weakening of the USD. This week will have a lot of important data, with unemployment, GDP and inflation data, as well as the NFP on Friday.
USD/JPY – was unable to move above the high reached in March and is currently moving down and correcting some of its major gains over the last 3 weeks. Profit taking is a large part of this and also winding down some positions, as there will be quite a few events on the calendar this week.
GBP/USD – has been really the strongest performer again the USD over the last few weeks, and with the USD now correction, we can expect the GBP to gain more ground.
USD/CAD – remains struggling with the resistance around the 1.3536 level. The weakening of the USD is helping the resistance level, but on the other hand the lower oil price is weakening the CAD, so we will have to wait to see which one will weight heavier, so far it looks like the weaker USD is more important than the dropping oil price, although it has been moving up this morning.
Indices
Dollar Index – is finally seeing a correction after a long and strong rally. The question now is until where the correction will be. If we look at the Fibonacci levels, we can see that for now it stopped at the first level, although this could obviously change the coming days. We could expect some more profit taking to occur, especially bearing in mind that we have the NFP this Friday.
S&P 500 – marked a new high on Friday but is moving down slightly at the moment. We are seeing a general correction in the instruments which have seen huge moves in recent weeks, such as the USD and also the S&P.
Commodities
Gold – is moving up as the USD is finally correcting a bit after a steady and long climb. The first barrier will be the 1200 level which besides a psychological level, also has 2 resistance levels just above that level.
Oil – saw a sharp drop on Friday as renewed doubts exists on the chances that OPEC will reach an agreement. Today there was supposed to be a meeting between OPEC and non-OPEC members, but this was canceled as Saudi Arabia decided not to participate. Wednesday is the OPEC meeting and if they will not reach a meaningful agreement, a cut of at least 1 mbpd, we can expect to see oil prices drop as that is the minimum needed to restore the balance in the market. On the other hand, Saudi Arabia said that it is possible that it would not be necessary to cut, as demand will be increasing next year. However, OPEC also doesn’t want to ramp up the price too much as that would bring back oil producers in the US, basically undoing 2 years of what OPEC was trying to do – fighting for market share.