U.S. Dollar Index (USDX)
The U.S. dollar index bounced from a seven-month low of 101.77 made a day ago and traded this morning above 102.00. However, the bets on Fed’s policy change remain to pressure the greenback and treasury yields.
Investors are eying the Empire State Manufacturing Index for more insight into the upcoming economic cycle stage.
The dollar index trades under heavy selling pressure and remains committed to the downtrend that started in early November. Meanwhile, the hourly chart shows robust selling pressure despite the overselling readings from RSI and MACD.
Pivot Point: 102.10
Japanese Yen (USDJPY)
The Japanese Yen traded near seven-month highs as investors await a potential policy shift at the Bank of Japan.
The yen hit a top of 127.22 per dollar during the Asian session, before easing a little during a holiday-thinned U.S. session to sit around 128.96.
Speculation is building about a change or end to Japan’s yield curve control policy, given that the market pushed 10-year yields above a ceiling set by the Bank of Japan (BOJ) of 0.5%.
Data showing a massive current account surplus in November also indicated that some facets of the Japanese economy remained strong despite broader headwinds.
Pivot Point: 128.50
Spot Gold (XAUUSD)
Gold prices hovered around eight-month highs on Tuesday, having stuck to a tight range in recent sessions as investors awaited more cues from a slew of economic data due this week, with a particular focus on any signs of a recession.
Spot gold rose 0.2% to $1,918.14 an ounce, while gold futures rose 0.1% to $1,920.95 an ounce. While the prospect of slowing U.S. interest rate hikes significantly boosted the yellow metal in recent weeks, it is now seeing renewed safe-haven demand in the face of a potential global recession this year.
Spot gold remains solid and hits the strong resistance at 1,930 while keeping the buying pressure at the highest levels in a few months. Gold remains supported above the range between 1,910 and 1,920 despite the correction from 1,930 to 1,905.
Pivot Point: 1,910
WTI Futures (CL-OIL)
Oil prices moved slightly this morning as markets await economic readings this week to gauge the potential for a recession. However, the focus is turning to demand forecasts from several major industry bodies.
Brent futures rose 0.3% to $84.44 a barrel, while WTI crude futures rose 0.2% to $79.31 a barrel.
Oil prices have been buoyed by a slide in the dollar to a nearly nine-month low, reinforcing expectations the Federal Reserve would slow the pace of rate hikes. A weaker greenback tends to boost demand for oil as it makes the commodity cheaper for buyers holding other currencies.
Pivot Point: 79.10