Today's forecasts for EUR/USD, GBP/USD, FTSE 100, Dow Jones, and gold
|EUR/USD
The Euro hit our support and target at 1.2170 pressured by firming US Treasury yields and by an acceleration in inflation in the eurozone. However, the main trend is still up, and therefore we expect upside price action to resume. Unless the EURUSD moves below the 50-period moving average, triggering further declines to the 200-period moving average as next key support, ahead of US jobless claims figures due out later today.
GBP/USD
A hawkish surprise from the FOMC meeting minutes provided modest gains in US bond yields and strengthening of the US dollar which in turn triggered some profit-booking for GBPUSD despite stronger than expected UK inflation figures. However, the downside remains cushioned, at least for the time being, by the 50-period moving average, indicating a positive move for today. Otherwise, a break below the 50-period SMA will trigger another round of selling for Sterling, with the 200-period SMA around 1.40 as next key support level.
Dow Jones
The recent price volatility that started with the weak NFP number almost 10 days ago coupled with the threat of an “out-of-hand” inflation, has created a lot of uncertainty for the Dow Jones. Will the US stock market break down like Bitcoin? Or should investors keep buying dips? Technically, if we continue to see downward price trending below the 200-period moving average, it is very likely that price will continue to move lower while attempting to find support near 33400.
DAX 30
Stocks in Frankfurt fell yesterday as the market's downturn entered its third day, with the DAX30 breaching at one point the key 200-period SMA after FOMC minutes revealed that policymakers discussed QE tapering. The German benchmark however quickly bounced back, preventing a bearish trend reversal signal. The next level of resistance for the Dax on the upside is 15300 but failure to move above it will trigger further decline with the 200-period SMA still acting as support.
Gold
FOMC minutes that hinted at the possibility of a sooner than expected debate on scaling back asset purchases, dragged down the yellow metal after hitting our resistance target at $1889, with technicals favoring another retest of yesterday’s session highs. Inflation concerns along with resurging virus cases in Asia, is keeping the bullion supported, with an hourly close above $1880 to favor further upside.
US oil
WTI Crude shed almost 3% in yesterday’s session, weighed down by rising coronavirus cases in Asia, a buildup in EIA inventories (1.321Mb vs. previous -0.427Mb), progress on the US-Iranian nuclear talks, and FOMC minutes that hinted at the possibility of a taper talk coming sooner than expected. Technically, an hourly close above $63.85 will favor further upside with $64.40 as the next resistance target.
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