Previous Week
The Yen, gold and oil declined sharply after a massive jump in the previous week on an escalation of US-Iran tensions. Iran retaliated by striking missile US forces in Iraq at al-Asad and Erbil. US President Trump said in a speech yesterday that "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world." This has dragged the demand for Safe-Haven assets like gold and yen.
DXY recovered more than 50 pips from the previous week close of 96.90. The index should break above 97.85 for further bullishness. It is currently trading around 96.81.
US economy has added 145k jobs in Dec vs forecast of 162k and the unemployment rate came at 5.6%. Average hourly earnings m/m at 0.1% vs estimate 0.3%. US dollar pared its gains after weak US NFP data.
The precious metal lost more than 50% from a 6-year high $1611. Any break below $1538 confirms further weakness, a dip till $1518/$1500 likely.
US 10 year bond yield is trading slightly weak after jumping more than 7% from low of 1.90%. The spread between US 10 year and 2 years has narrowed to 24.9 bps from 35.7 bps
Weekly Technical:
EURUSD:
Major trend reversal level- 1.12860
Near term support- 1.10600/1.1000
Near term resistance – 1.1180/ 1.1245
USDJPY:
Major trend reversal level- 109.75
Near term support- 109/10
Near term resistance – 109.75/110.60
USDCHF
Major trend reversal level- 0.9645
Near term support- 0.9645/0.9540
Near term resistance – 0.9770/0.9845
USDCAD
Major trend reversal level- 1.22950
Near term support- 1.3020/1.2950
Near term resistance – 1.3105/1.3180
Gold
Major trend reversal level- $1600
Near term support- $1550/$1515
Near term resistance – $1600/$1625
WTI Crude
Major trend reversal level- $57.75
Near term support- $57.75/$55
Near term resistance – $61.50/$63.50.
Major Economic events for the week
US CPI m/m – Tuesday (1:30 pm GMT)
US retail sales - Thursday (1:30 pm GMT)
US Building permits –Friday (1:30 pm GMT)
