Forex | FX | Weekly Analysis Overview

Dollar Strength Seen As Risk Appetite Dominates

The graph below shows how the dollar was stronger than all of the major currency pairs last week.  Our weekly USD technical analysis update looked at the weekly timeframe price action and how the USDX has formed a consolidation inside candle following a bullish engulfing variant.  Most of the bullish USDX price action came on Friday and a continuation of this USD strength could see the dollar break recent range highs.   Risk appetite trends continue to dominate as does the U.S. monetary policy outlook.

Gold Outperforms Currency Majors

Gold has outperformed the currency majors as the precious metal found demand on the back of  the Indian Jewelry strike ending and global risk aversion.  Gold has rallied as stock markets fell which once again brings market talk of gold as a “safe haven”.  Gold is still however trading below the 200 day moving average.  Spanish 10 year bonds have breached 6% and gold may see continued safe haven flows if this trend continues.

Currency Majors And Gold Versus The Dollar Last Week

The German ZEW Economic Sentiment report and Unemployment Claims data from the U.S. are amongst the highlights of the coming week. You can see our pound/dollar technical analysis update (watch out for inflation data on Tuesday and BOE minutes Wednesday) and USDJPY Analysis overview (Japanese trade balance data due on Wednesday) for further insights into these respective currencies.