Good Day Traders,
Hopefully you’re all having a great day so far. Last week financial markets were pretty active and interesting to say the least. In this article we will go through the FX market and Gold last week performance and potential expectations on the week ahead.
Gold had a pretty weak week, losing almost 3% of the value. Looking from the technical perspective, the nearest KEY area of support stands @1680$. Depending on the upcoming week's US Dollar movement, gold is expected to stay bearish and potentially retest the 1680-1650$ area. The bullish scenario would be taken into consideration only if 1800$ would be taken out to the upside.
US Dollar Index
DXY had a strong bullish week overall closing at @90.87 after the last week high of 90.28. The next key area of a resistance sits @92.00 and if the stimulus check and third official vaccine supplier are gonna be accepted, DXY is expected to remain more into the bull side.
FX Sentiment (Medium-Term)
By looking at our Odin Sentiment Chart (available for Odin Pro members) we can clearly see that so far the strength of the currencies are as following:
GBP (the strongest)
JPY (the weakest)
By having this information, we can expect the downside pullbacks from GBP, USD, NZD and bullish rallies from JPY, CHF, EUR. These pullbacks/rallies should be expected to happen over the course of the first part of the week. While these are expected to be short term pullbacks/rallies if certain key levels will be taken out the overall sentiment can be changed as well. So far we still expect GBP, USD to remain strong while JPY to remain pretty weak, but as we just mentioned, short term pullbacks/rallies are also expected.
Wishing you all the best for the next week!
Matt // Head Trader at Odin Platform