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As we gear up for another dynamic week in the markets starting January 20th, it’s essential to keep an eye on key instruments and potential volatilities, especially with significant political events on the horizon. Tomorrow marks a pivotal moment as Mr. Trump takes office, promising to stir substantial market activity.
Let’s dive straight into this week’s analysis for our selected instruments:
US Dollar Index (DXY)
The Dollar Index exhibits a bullish stance on the monthly frame, with key resistance zones identified between 110.90 and 115, courtesy of multiple Fibonacci extensions. However, short-term bearish divergence on the daily suggests potential pullbacks before a continuation of the upward trend. Key levels to watch are 107 for support and 114 for resistance.
AUDJPY
On a monthly scale, AUDJPY has touched a significant resistance zone, showing signs of exhaustion with a bearish MACD divergence. The weekly and daily frames support a downward bias, with potential short targets set around the 92.10 area based on Fibonacci retracement from recent highs. Upcoming interest rate decisions from the Bank of Japan could further influence this pair, possibly strengthening the JPY.
Crude Oil
Crude oil has found strong monthly support at around $66.89. While it attempted a breakout above the $78.32 resistance, the failure to hold suggests a potential pullback to $74-$73.7. Both the daily and 4-hour charts indicate that while the bullish momentum may be waning, the medium-term outlook remains upward, with corrections seen as buying opportunities.
USDCAD
USDCAD is pushing towards the 1.4750 level on a bullish monthly trajectory. No bearish divergence is observed, suggesting the continuation of this trend with the next psychological barrier at 1.5. Immediate support lies around 1.43, making any dips above this level an opportunity to reinforce bullish positions towards 1.4750 and potentially higher.
XAUUSD (Gold)
Gold currently confronts resistance at $2720, with the overall trend still skewed towards bullish on higher time frames. Daily indicators suggest possible short-term corrections towards $2685-2670, which should be viewed as buying opportunities. The target for any bullish resurgence remains around the $2750-2848 zones.
The week ahead, devoid of major economic announcements but marked by a significant political event, calls for heightened vigilance.
The instruments analyzed suggest varied dynamics, with overarching bullish sentiments on USDCAD and gold, whereas AUDJPY could see bearish movements. Crude oil's short-term pullback does not detract from its medium-term bullish outlook.
As always, stay tuned to updates and manage your trades with careful consideration of technical levels and macroeconomic influences.
Wishing you a profitable trading week ahead!
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