FX And Oil Week Ahead: Finding Our Bearings Ahead Of Trump's Handover

| About: SPDR Gold (GLD)
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Summary

Big week for the UK with Brexit plans being announced.

Dollar Index likely to rise in the coming sessions before another selloff.

WTI likely to rise in the coming week.

This coming week will likely be a big one for the British Pound given the details of PM May's Brexit plan are going to be revealed this week. Given the news, and rumors that the plan are for a hard Brexit, it is likely that the pound will see pressure into the announcement.

Other than that, we should see the USD make a bounce in the coming week, with the Fed Beige Book the key data point markets will be watching this week.

Trading and Technical Strategy for the week ahead:

Dollar Index, DXY (UUP, USDU, UDN )

Charts created by themarketjournal, data provided by SAXO markets

Key Levels
Support: 101.10/ 99.68/ 98.40/ 97.12
Resistance: 104/104.50/ 105.25/ 106
*Level to consider buying at for support and selling at for resistance for intra-day trades

The USD continues to its consolidation to work off overbought conditions after a strong move higher in the greenback following Trump's victory and the Fed's December meeting. As it stands, the USD will likely bounce early next week before continuing its consolidation again thereafter toward the 99.68 level. Thereafter, we expect the greenback to move to new highs above 104, once this consolidation is done.

Trading strategy:

We think traders can go long the greenback against the EUR, GBP & JPY next week, and stop the position out should 100.70 on the Index be broken. An ideal level to exit the trade would be around the 102.20 level, where the next leg down in the Index is expected.

XAU/USD (NYSEARCA:GLD)

Charts created by themarketjournal, data provided by SAXO markets

Key Levels
Support: 1170/ 1130/ *1100/ 1050
Resistance: 1205/ 1220/ 1245/ 1265/1280/1305/1330/1360/1400
*Level to consider buying at for support & selling at for resistance for intra-day trades

GOLD looks to have started its consolidation before making its final move toward the 1233/40 level, where a medium-term top is expected before a move lower thereafter. The key level over the coming week is 1187, above which gold could likely head straight to 1233/40, whilst a break would indicate 1164/74 will likely be tested before the rise to 1233/40.

Trading strategy:

We think that aggressive gold traders can go long the metal on a dip next week with a stop loss at the 1186.90 level, to play the potential upside move in gold. If stopped out, then traders should instead look to buy again around the 1164/74 level to play this upside move.

WTI OIL (USO)

Charts created by themarketjournal, data provided by SAXO markets

Key Levels
Support: 51.30/ 50.20/ 49.80/ 49/ 48.30/47.15/ 46.30/ 45.30
Resistance: 52.60/ 53.80/ 55/ 56.20/ 57/ 58.50
*Level to consider buying at for support & selling at for resistance for intra-day trades

*Note on our price chart: Before we dive into the WTI technical analysis, we have decided to use the WTI continuous futures price as a chart instead of the original spot price posted in our article. This price will match the nearest dated WTI crude futures contract which will switch automatically once the contract settles, moving on to track the next nearest dated futures contract. We will also be only analyzing the technical aspect of the WTI price, given the fundamental aspect of WTI oil is well covered by many subject matter experts in the energy commodities section. At this time, the nearest dated futures contract being tracked by the above price chart is the February 2017 contract.

WTI oil bullish price action looks promising after hitting the stipulated $50.50 support last week. We think that the current WTI pullback should end around the $51.76 level with WTI appreciating again thereafter.

Trading strategy:

WTI traders can consider long positions at $51.76 with a stop loss at $50.60 to play expected upside. A break of $50.60 could see WTI sink below $49 from a technical perspective. For more updates throughout the week, do join our mailing list.

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