Monday Briefing: From DXY. Gold to Latest FX Headlines; Dec 05, 2022

US Dollar Index Overview

  • DXY moves in rigid boundaries and stabilizes around 104.50 mark.
  • It made intraday high at 104.76 and low at 104.16 mark.
  • A day Chart and H1 chart with triple EMA suggest down trend for the time being.
  • Immediate hurdles are seen at 105.18 to 104.10 mark.
  • A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

Technical Analysis: XAU/USD (Gold)

  • Gold starts a new day on a lower note and slips back below $1,790 mark.
  • The pair made intraday high at $1,810 and Low at $1,787 mark.
  • A day chart and H1 chart with triple EMA suggest bullish trend for the time being.
  • A sustained close above $1,797 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,784 on H1 chart will test further supports.

Key Headlines for the FX market:

  • China may announce 10 new COVID-19 easing measures as early as Wednesday, two sources with knowledge of the matter told Reuters.
  • The G7 decision to put a 60$ per barrel price cap on Russian seaborne oil came into force on Monday, hoping to limit Moscow’s ability to finance its war. Russia has said it will not abide by this measure. Meanwhile, it launched a new round of missiles, Ukraine said.
  • Thousands of residents in Indonesia’s East Java were on high alert on Monday after a violent eruption at the island’s tallest volcano prompted authorities to impose an 8-kilometer no-go zone and forced evacuations of entire villages.
  • South African President Cyril Ramaphosa’s fate was hanging in the balance on Monday as the executive committee of the governing party discussed allegations he may have committed misconduct and violated the oath of office.
  • President Joe Biden signed legislation on Friday to block a national railroad strike, that could have cost the U.S. economy up to $2 billion a day. The deal includes a 24% pay increase over five years – but no short-term sick days.
  • Britain’s economy is on course to shrink 0.4% next year as inflation remains high and companies put investment on hold, with gloomy implications for longer-term growth, the Confederation of Business Industry forecast on Monday.
  • China’s stocks and currency have jumped and global banks have turned more bullish on its prospects, as Beijing moved towards a more targeted zero-COVID policy while reducing virus testing and quarantines. Investors bet China’s rally on easing COVID curbs will be furious but fleeting.
  • Interest rate decisions in Australia and India are the main set-piece events in Asia this week for investors, while China’s Politburo holds its first meeting to discuss the policies that will set Beijing’s economic direction over the coming year.
  • As the Bank of Canada considers ditching oversized interest rate hikes, it is dealing with an economy likely more overheated than previously thought but also the bond market’s clearest signal yet that recession and lower inflation lie ahead.

Source: Reuters

Keep an eye open for the latest news and fundamentals affecting the FX markets.

Take a look and do trade wisely!
Good Luck