Dollar has begun 2018 on a rather dismal note. Anticipated rate increases have been put off and a slovenly inflation stance won't make the Fed raise rates anytime soon.
Gold sustained the previous year’s rally into 2018 as it closed the previous week at $1338/oz., the most extended rally seen recently. Resistance was found at $1350/oz. and $1365/oz. In the absence of any decisive event related to the dollar likely in the forthcoming week an amendment in the rally may happen from a mechanical angle.
EUR/USD stood to profit in the week gone by enabled by seemingly hawkish ECB minutes. Angela Merkel improved her chances for constituting a new regime in Germany which provided impetus to the Euro. EURUSD breached 1.2100 easily and is all set to reach 1.2400. EURUSD investors will eagerly await the inflation data due for release on Wednesday.
GBPUSD also profited from a feeble US dollar. A weaker than predicted Brexit is a likelihood buttressing the pound. GBPUSD is resting comfortably towards the uptrend with robust support at 1.3350. GBPUSD has CPI and retail sales data to be announced on Tuesday and Friday. With the strong bullishness dips must be most likely to be bought.
USDCAD had a tumultuous week as robust data dragged USDCAD down to 1.2400 only to be raised back up with apprehensions over NAFTA resurfacing. Bank of Canada will decide on rate hikes this week which would set the momentum for USDCAD for the near future.