USD Gains Steam & European Majors Drift Lower

With a stellar jobs data, the trade spat between the two biggest economies increases as China brings the issues to the WTO and European majors particularly the Sterling Pound have been quite supportive for the USD. The DXY is seen retracing back to its session high at 95.60 basis point as it is the strongest currency against its counterparts.

With the Sterling Pound (CABLE) drifting lower when it missed its retail sales report. GBPUSD is at 1.2984 heading well below the 1.2880 levels where it came from. While the EURUSD is keeping tis pace trading well below 1.1600 retesting it minor support levels, in which case both majors are in the defensive trying their respective best to hold these levels.

That includes the USDJPY corrective price action briefly dropping below the 113.00 handle due to risk aversion and from a light turnover from speculative liquidation as it draws closer to the US trading session. Meanwhile, with China soft data, commodity currency AUDUSD have likewise maintained a weaker stance as it falls to the 0.7343 where a revisit from where it came from at 0.7180 - 0.7280 range would not be discounted as long as the USD keeps its pace moving forward.
 
Although, the surrounding factors quite supportive of the USD strength came from the US  data, other equally important factors came from lower Gold at $1216.00 and Oil prices at $69.90 after marking a $67.80 low which have kept the USD index steady to higher price movements well in line with the FED's rate hike guidance from FED chair Jerome Powell's current testimony. While US equities are in a corrective mode from trade uncertainty will still be a concern for most investors relentlessly reacting to a volatile trade spat between China and the US including its allies.

USD Weakness Lifts Major European Currencies Higher

Among others!

With some Asian exchanges still closed for the holiday, the start of the new year for China's Hang Seng Index (HSI) moved reaching a 10 year high at 30515.31, +596.16 pts. = 1.99% on the first trading day of 2018. With Shanghai at 3349.05 +41.88 = 1.27% increase likewise, shrugged off the decline in the US equities on the last day of trading 2017.

With the USD slipping into negative territory for the year at 92.08, the USD Index would have quite some difficulty to recover at this early stage. Currently, the US Dollar index is at 91.85 with a low at 91.75. And may find itself in search of a bottom at the start of January trading. For now, any price recovery may simply end up as a relief recovery up until the mid-term of the 1st quarter of 2018.

AUDUSD As of January 2, 2018

Which can only mean good for the Aussie Dollar now at 0.7840 from the bottom price of 0.7500 just last Dec 08, 2017. And the continuation for the EURO currently above the all important price of 1.1880 and is now at 1.2035 to this writing. While CABLE have been dragged from the BREXIT negotiation table, it had worked itself back to its current levels at 1.3555 with a second wind aiming to mark 1.3580 - 1.3680 range for the week ahead.

With the backdrop on OIL's recovery above $60.00/bbl and Gold managing to stay afloat above $1300 /troy oz. at the rate that both markets have kept a firm grip due to the USD soft prices for the 2017, after briefly touching a 103.00 basis point on the 1st week of January 2017. And continued its decline starting the 2nd quarter thereafter. That's is why we have stayed well within the equities market towards the end of the year. With only to carry the AUSSIE Dollar and CABLE as Europe starts to gain economic ground from their recent lows, while focused on BITCOIN and GBTC Investment Trust settlements prior to the CBOE and CME launching their respective trading. An excellent trade decision if we may call it above par! As it would be unwise to trade against the CME when it comes to Futures trading.  

Let's see the first month's trading and decide how the 1st quarter would really look like based on our near term analysis for the USD as always our basis for market reference. 

Backing the #USD Resiliency with US #Equities Corrective Move...

Foreign Currency Steps Back

The #USD finally showed its slight recovery reacting to the FED Chair Janet Yellen on a gradual rate increase heading towards 2018. Sluggish as it may seem the price recovery may find a range high near the initial levels of 95.05/10 for the US Dollar Index (DXY) in the mid-term as the 3rd quarter comes to a close. It is currently at the levels above the 93.00 basis point which is quite resilient against a backdrop of other fundamentals such as higher Crude Oil above 51.00 and Gold prices hovering at USD1295.00 from its previous high at 1357.62 marked in the market dated the 4th of Sept. 2017. 

Likewise, this move have been an additional catalyst for the European majors to continue their respective price drawback, with the #EURO find its prices below the 1.1880 levels while #CABLE followed it previous corrective move at 1.3425 to this writing. The recent market call on the USD have shown its effectiveness as the range bound recovery would still be at play between now and the first two (2) weeks of the October. As we have previously shared MegaTrade101's scale guide on trend direction including the price parameters to watch for with the  Dow Jones Industrial Average - #DOW.

Most analyst have been expecting a correction for US Equities for quite sometime now, as prices are coming back from the heavily traded #NASDAQ Tech sector. The individual stocks on #FB #BABA #AMZN #GOOG #MSFT have seen some initial signals of such correction as early as the today that may have lost some narrative steam on momentum.

These are the dark clouds of 'uncertainty' forming when NASDAQ stocks that started the lead on the first quarter 2017 may likewise end the year from which they have came from. The basic logic of first in and last out may still apply in today's market condition. Yet again, we have to face what is in store for the 4th quarter of the year. 

#EURO #GOLD Benefits Most From Volatility #USD Decline #North Korean Action

With the USD - DXY still heading south at the 92.16 low levels after coming from a relief price recovery the #EURUSD have taken its turn running to a high at 1.2070 to this writing. This provided quite a bullish signal after going through the 1.1880 - 1.19010 barriers when a continuing USD dollar was eminent to persist its course south. Meanwhile, #EURGBP continues its direction above 0.9300 for now.

Gold prices has enjoyed one of the most benefits from a USD decline after a whipsaw of price swings in the early first two weeks of August. But now Gold is currently trading at 1320.00 attributing the recent climb from North Korean actions leading a 'risk-off' sentiment in the markets. Obviously, geopolitical risks creates volatility in the market place which would include stock prices as well.

With Gold's rise and the consumer confidence lower survey adds pressure for the green buck for now. With a string of news update on the 2nd quarter GDP, PCE figures, and housing figures, while Friday would be Non-Farm Payrolls - NFP that would have everyone focused on the release other than updates on Harvey affecting Oil and Gasoline prices.

US Equities Corrective Moves are Relatively Good

That depends whether you're a  'Bull or Bear'

With the way prices has moved after that rebound Monday, a lot of mix outlook from analyst have driven market players around the word 'Uncertainty' again. With Oil prices taking center stage as it drifts lower into negative territory as it has been officially claimed have caused DOW & SP500 prices to follow suit after Monday's rally. And the obvious price action between these two (2) indices are relatively contracting as we see today.

Currently, with Oil prices trading @43.35 along side with the precious metals such as Gold below the USD1250.00 as the USD gains ground from its 96.32 basis point low from last week's trading activity is something to watch for.

This includes the probability of a market consolidation with price swings in both directions could occur even after June 23, 2017. Where we do expect some market volatility being the triple witching day a week ahead to the end of the 2nd quarter trading for 2017. The level of difficulty contrary to this is the fact that we have called a wider price swings after the USD reached its 103 bp mark and drifted lower at the mid-range of its high and low band. And is currently at a price recovery mode @97.70.

Our take on these equity indices declines are limited to an orderly correction in the double digits contrary to what others have been clamoring for. But these moves would barely budge well selected stocks as investors alternating  trade plays dominate alongside the Nasdaq and Dow equities. Which is what we are applying are trades from as well. While all these price swings create a price pullback well within the session that also includes validation from technical divergences that have occurred prior to the continuing trend.

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USD Strength Recovery Remains Sensitive

As the #USD ended last week's trading at a higher note; it would remain at these levels for the following reasons. And these simple yet valid fundamentals will sustain a positive tone where #Gold, #Oil, #European #currency majors and the positive expectations for a rate hike for the year would hold. The data release on the upcoming FOMC meeting as a forward guidance and the ECB speeches will remain as the main focus for this week's activity.

Prices on Gold below the USD1350.00/oz  would remain bearish contrary to having its prices recover from the 1250.00 support we have seen so far. And with OIL prices have pulling back below the USD45.00 /bl. handle added to the USD lift with the European currency pairs retreating to their former low band have remained with the market's negative outlook.

Guiding the trades by focusing on the USD direction will provide  a better footing on what the market remains supportive. Note that the overall market behavior including the (3) major US Stock indices is vulnerable and quite sensitive to the slightest comments made prior to any market reports.

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#TSOT - #GOLD Continues DECLINE as #USD Gains Strength

#GOLD as of 5.30.16 Asia Trading

In our previous shared link; #GOLD prices already declined for almost five consecutive weeks in line with the #USD rally. From a recent high @1303.62 to its current low @1199.70 in the Asian trading session, the probability to reach its target levels again @1150.00 may soon be made.

The resulting liquidation and profit-taking levels as Gold prices decline is a direct correlated effect from the continued USD price recovery above the 95.50 basis point in the Asian trading session For as long as the USD continues to gain strength the selling pressure would build up and even may place a lid on Oil prices which has slipped back below the USD50.00 levels. This is in reference to our previous shared link from market watch regarding the probability for GOLD to decline even towards the USD1000 handle.