The American dollar gained 12% this year, mostly in the last few months, on speculations that Fed will raise interest rates sooner. Janet Yellen proved patience even despite encouraging positive economic data. This attitude made the American indices raise while the dollar continued its rally against the majority of its counterparts. Tomorrow is the most important day of the week regarding the economic data reports as the monthly GDP is expected to be published down to 0.1% from 0.4% last month,nevertheless the final version of the quarterly GDP is expected to overcome the expectations of 3.9% and raise to 4.3%. Also, the core durable goods are expected to increase to 1.1% from -1.1%.These data, if reported in accordance with the expectations or better than that, may have an important impact on the EURUSD currency pair which may head lower, to the 1.2200 support level.
The ruble has been showing signs of stabilization as the USDRUB went down below the 60 level. The correction of the ruble also reduced the pressure on the wheat prices. As Russia is the fourth biggest exporter of wheat in the world, the grain quotation took a considerable advance to the maximum level of 676.45 points as Russian exporters were expected to sell a lot and rose the price. This situation didn’t occur so the price of wheat signaled a correction to the 626 points support, threatening to go down to the 610 level.
The gold price is currently developing a range formation on an inferior time interval, but on a large scale it may be in danger to fall to lower levels. Next year investors may take short positions on gold based on technical signals. Here are some fundamentals that can sustain this scenario:
- The Fed is preparing to raise interest rates
- Japan doesn’t have the necessary background to give up the stimulative measures
- China may make further steps in the dovish policy
- Mario Draghi is currently trying to reach consensus about starting to buy government bonds.
The price of gold may fall to 1100 dollars per ounce and stabilize around the 1000 dollar level or below.
The oil market carries on its second correction as the United Arab Emirates energy minister said the non-OPEC countries oversupplied the market so they should start cutting the production. Qatar’s energy minister shares this believe, but there is still no reaction from the non-OPEC countries. The WTI oil is stabilized between 53.4 and 58.4 in the last few trading days, while the Brent oil is falling from the 62 dollar local high and may encounter support at the 60 dollars per barrel level.
Ahead of Christmas and New Year holidays, we will see decline on liquidity and momentum towards the end of the week.