Following on from a week which was littered with news releases, this week the pace slows. Markets will now digest the latest NFP figures and Rate decisions from the majors before considering their next moves.
The overriding picture seems to be of continued dollar weakness. Its biggest trading partner the Euro sored on Fridays NFP figures, leading a broad based dollar sell off. Whether this continues into this week will depend upon ECB Presidents Draghi’s speech and US Core Retail Sales figures due for release on Thursday.
Market Indices remain above all-time highs, with the exception of the FTSE. The UK Index looks to be one of the weaker of the major global Indices at present. Despite the the technical outlook points to further gains for this market this week, while the Dow Jones could well push to new highs again.
Gold will remain in focus, with trader’s trying to assess whether the precious metal has carved out its final low. However given the backdrop of rising equities the prognosis is not. If nothing else, the metal is likely to at least post a temporary low this week.
Key News This Week
In Focus
EUR/USD – The pair moved higher on Friday, ending just above the 1.3700 level. Such fast gains could see consolidation as the week starts. 1.3740 is next top side resistance while 1.3660 should contain any downside moves.
USD/JPY – Closing back above 102.80 there is real potential for another push above 103.00 this week. Given the current momentum in the pair, the recent higher on Dec 3rd (103.37) looks likely to be broken this week.
USD/CHF – Breaking lower the USDCHF looks week from this level. The pair has failed to hold above 0.8922 and we would expect falls to accelerate this week. The October low of 0.8889 is the first level of resistance.
GBP/USD – Despite its recent strength, GBP/USD didn’t enjoy similar gains during Fridays rally. The pair closed offs its high point for the week by some 90 pips, ending at 1.6344. This keeps the pair just above a recent rising trend line in place since mid-November. A break here would likely see the pair moving lower.
Major Indices
DOW – The Index reversed on Friday having fallen heavily at the start of the week. Support was found at 15800. The weekly close above 16000 and the bullish hammer support another push higher this week.
NASDAQ – The Index ended lower than its high this week but still forged higher. The 4000 level supported price action and the expectation is for further gains this week. 4050 looks to offer near term support.
FTSE – The FTSE recovered on Friday to push back above 6500. The succession of weekly falls on the index give an overall bearish tone to the chart. However Fridays bounce could signal a low for now.
Commodities
Oil – Briefly dipping below $93.00 per barrel, the price rallied strongly towards the end of the week. Closing just below $98 per barrel at $97.76, we would expect to see further price gains this week – provided we see a daily close above this level.
Gold – Price tested the $1200 level last week where it found support. While the bounce from this level was not strong, the fact that the price pushed higher suggests the likelihood of further gains. There is also the potential for a double bottom forming on the charts.
Stocks
There is nothing on the calendar to interest binary traders this week.