Market Analysis: Dollar Strong, Gold Surges, Oil Struggles

Today’s trading forecast: The dollar is steady, gold is elevated, and oil faces pressure. Expect muted activity in Europe and the US sessions.

Today’s trading forecast anticipates relatively muted activity as the dollar index (DXY) stabilizes around 102.70 and gold hovers near $2,180/oz. On the other hand, crude oil prices continue to face downward pressure, with WTI oil dipping below $77.50 per barrel.

With no significant news events scheduled today, trading activity in the European and US markets may remain subdued as the new trading week begins. However, last Friday’s stronger-than-expected Non-Farm Payrolls (NFPs) report could support the DXY, potentially leading to a slight retracement higher.

Dollar Index (DXY)

Following a decline of 1.9% since mid-February, the DXY dipped below 102.50 last Friday but may see some upward movement today, fueled by the positive NFPs report.

Key News Events Today

• There are no major scheduled news events.

Expectations for DXY Today

While dollar demand has decreased recently, the more robust NFPs report could boost the DXY, leading to a potential retracement higher during today’s trading session.

Central Bank Notes

• The Federal Funds Rate target range remains unchanged at 5.25% to 5.50%.
• The Committee aims for maximum employment and inflation at a rate of 2.0% over the longer run.
• Economic indicators suggest solid expansion, with job gains remaining strong and inflation, although elevated, showing signs of easing.

Market Analysis: Dollar Strong, Gold Surges, Oil Struggles

In other markets

Gold (XAU)

After hitting an all-time high of $2,195/oz last Friday, gold prices slightly retreated to close around $2,177/oz. Market analysts anticipate the precious metal will maintain its elevated position today after surging nearly 8.5% over the past three weeks.

Australian Dollar (AUD)

Following solid gains after the NFPs report, the Australian dollar faced downward pressure, drifting lower towards 0.6600. This trend may continue as the day progresses.

Kiwi Dollar (NZD)

The Kiwi saw a significant pullback after briefly rising post-NFPs, erasing all gains and trading around 0.6175. anticipate further downward movement today.

Japanese Yen (JPY)

The Japanese yen saw inflows leading to a dive in USD/JPY to 146.50 last Friday. Although facing overhead pressure, a retracement higher for USD/JPY may occur today before resuming its downward trend.

Euro (EUR)

The Euro stalled around 1.0980 post-NFPs, pulling back to under 1.0950. It may face continued pressure throughout today’s trading session.

Swiss Franc (CHF)

The Swiss franc weakened against the dollar after the NFPs, causing USD/CHF to bounce off the 0.8730 level. Expect the currency pair to continue its upward movement today.

Pound (GBP)

The Pound pulled back post-NFPs, closing under 1.2850. It may continue to face pressure throughout today’s trading session.

Canadian Dollar (CAD)

USD/CAD reversed after NFPs, closing in the green at 1.3495. However, the currency pair may rebound as the new trading week begins.

Oil

WTI oil closed around $77.95 per barrel last Friday and resumed its downtrend as markets reopened today. Prices will likely slide further, driven by concerns over slower global demand.

Today’s trading session anticipates relative quietness across significant markets. The dollar could retrace higher, gold could maintain its elevated position, and oil could face continued downward pressure.

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