USD Index

This article is daily technical analysis from Ray Shen.

Currency markets were quiet over the Christmas holiday, but bulls were betting on gold and crude oil. Weakness in U.S. manufacturing could continue to drag on the broader economy, with a contraction in orders for durable goods overnight suggesting weak business confidence will continue to weigh on growth in the fourth quarter. Industrial momentum will remain weak in 2020, and Boeing’s decision to halt production of the 737 MAX will continue to weigh on orders.

During the Christmas holidays, the dollar index traded in a narrow range around the 200-day moving average of 97.70, with pressure above the 98.00 integer mark, short-term support below 97.40, and support below the 97.00 line.

Spot gold exploded ahead of the Christmas holiday, hitting a seven-week high of $1,497.60 an ounce since Nov. 6, as investors remained focused on long-term geopolitical risks and markets remained fraught with uncertainty that was not going to go away anytime soon. Gold got a boost from poor U.S. economic data overnight. Despite the improved sentiment, safe-haven assets such as gold have held up very well. In addition, data released by the CFTC last week showed that large speculators had re-established bullish positions in gold futures.

Gold prices are challenging the 1500 mark, due to the lack of market liquidity, should be mainly on the sidelines, below support in the 1480.

Opec’s latest agreement to cut output and related comments appeared to boost oil market sentiment, with the latest data showing that speculative net long positions in Nymex WTI crude hit their highest level since April, more than doubling month-on-month.

New York crude once again challenged the 61.00 mark, with pressure at 62.00 above, short-term support at 59.00 below and support around 58.00 below.

PS: Today focus

The market will be closed for Christmas

The above views are for reference only, not for ordering basis. Investment is risky, so proceed with caution.

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