Dow Charges to Record While Dollar, Gold, Oil, FX Majors Embrace Ranges
We are heading into a new trading week with some extreme divergence in benchmark assets. On the one hand, we have the Dow leading US indices to record highs as the VIX remains crushed to extreme lows. Yet, the speculative single-mindedness this commitment may suggest doesn’t seem to be well reflected in other risk assets, major FX pairs, crude oil or gold. Why?
Gold prices may be given a tailwind from the FOMC minutes and escalating trade war risks if they fuel demand for anti-fiat assets amid expectations of additional Fed easing.
The Australian Dollar has been hit in recent days by a slew of bearish news from both home and abroad. There may be less of this to come in the week ahead, but it’s still hard to see the currency rising.
The Euro’s struggle to move higher against a range of currencies continues and without further support this is likely to continue into the year-end.
Dow Jones hits record high, however, central bank liquidity prompts volatility implosion. FTSE 100 among underperformers with focus remaining on politics.
The Aussie sell-off halted at key lateral support this week and puts the focus on a break of this key range. Here are the levels that matter on the AUD/USD weekly chart.
The Dow Jones moved confidently higher last week as it added onto recent gains. Now, stocks will aim to continue their rally while enjoying support from prior all-time highs.
Gold eased down to a three-month low this past week, but the move hardly counted as a ‘break’ and was even lighter when it came to follow through. Where and when will the next trend form?
The outlook for the British Pound continues to hinge on the outcome of December’s UK election and its implications for Brexit. The contest’s first debate looms ahead.
As we head into next week, Cable is continuing to digest the massive leg higher last month, which at some point soon could mean another surge.
USD (DXY) = Green
Oil = Black
Gold (XAUUSD) = Yellow
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