Dollar And Markets To Push Higher?

by Phil Moore November 25, 2013

Trading this week again focuses on the dollar as the Greenback heads towards its monthly high. Gains in the US dollar were particularly noticeable against the Yen and Gold last week, both of which retreated in the face of strong dollar gains.

In what is a fairly low risk week for news flow there is little to fundamentally alter current risk trends in eh currency markets. Possibly the most significant event comes at the start of the week with US pending home sales and the CB Consumer confidence report. Either could help to shape the dollar’s direction over the rest of the week.

Over the other side of the Atlantic it is the British Pound that is likely to draw most attention. Cable, like the Euro has been failing to break higher over the previous sessions. Wednesday GBP figures could cause a break either way in the pair.

Indices remain bullish with both the DOW and NASDAQ reaching new highs. Global indices overall look likely to continue higher after breaking key support levels last week. Commodities however continue to look under pressure, with Gold in particular looking set to move lower if Indices and the US dollar continue their expected moves higher.

Key News This Week

Forex

EUR/USD - Following choppy sideways action for much of last week, the Euro has failed to push above the 1.3550 area with any conviction. Although the pair may push north at the start of the week, the 1.3580 level, if reached, might prove a shrewd place to go short.

USD/JPY - The bullish outlook for the pair continues, with a strong push above 100.00 last week sending the pair as high as 101.34. A break of the recent high at 101.52 set in July could see a quick move above 103.00 in the subsequent trading sessions.

USD/CHF - Sticking to the top of a falling trend line since the 7th November the overall outlook looks constructive; albeit a reversal would need to occur in the next few trading sessions. The 0.9050-70 region has proven support previously. An inverted head and could be forming.

GBP/USD - Cable has ground higher over the course of the week and looks toppy. Having twice failed to push through the 1.6260 level in recent weeks, the pair looks likely to reverse and head lower. A move towards this level could provide a good opportunity to trade the pair to the downside.

Major Indices

DOW - The break and close above the 16,000 continues to contribute to a bullish outlook for the pair. We would continue to look higher this week with the16000 level offering the first level of support, with 15800 offering a solid foundation against any severe pullbacks.

NASDAQ - An early fall on the Nasdaq at the start of last week was subsequently reversed. This has left a strong technical signal on the chart indicating further bullish gains. 3900 looks solid support and a break of the 4000 level is likely.

FTSE - Continuing its sideways movement again last week, the UK’s key Index shows little directional conviction. The range between 6500 and 6850 looks a good play over the coming sessions.

Commodities

Oil – Last week we wrote “we would look higher with $92.50 as a first level of support.” Support held just above 93.00 but movement was broadly sideways with the price failing to gain traction or break above 96.00. Stand aside until a clearer direction can be established.
Gold – The Gold price moved below the $1250 level to close at $1243. The metal remains under pressure, not helped by the state of the US Dollar which has helped to pressure pricing. We have to look lower for now with $1200 the next psychological level of support.

Stocks

A fairly quiet week in terms of companies reporting that might interest those trading Stocks with binary options. The only report of note comes from tech giant on Hewlett-Packard on Thursday.