FX And Oil Week Ahead: Now That Trump Is Officially President...

| About: The United (USO)

Summary

DXY nearing support and likely to rise shortly.

Gold likely to remain under pressure.

WTI is at a make or break point technically.

Trump's inauguration speech undoubtedly had the world's attention, and we will be watching for fiscal policy actions, as well as international responses from various trade partners.

On the economic data front, Q4 preliminary GDP data, durable goods numbers and consumer sentiment numbers are the key numbers to watch this week.

Trading and Technical Strategy for the week ahead:

Dollar Index, DXY (UUP, USDU, UDN, FXE, FXB )

Charts created by themarketjournal, data provided by SAXO markets

Key Levels
Support: 99.68/ 98.40/ 97.12
Resistance: 101.10/ 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 move as expected with the DXY now nearing the key 99.68 support level. Thereafter, we expect the DXY to continue it's rally from 2016 to new highs above the 104 level.

Trading strategy:

Our strategy would be to go long the greenback against the EUR & GBP over the coming week with 1.0800 the key level we would sell at for the EUR, and 1.2460 the key level we would sell at for the GBP.

With regards to the GBP, we think the Sterling relief rally from UK PM May's speech will likely exhaust into the key 1.2460/1.2500 resistance zone.

XAU/USD (NYSEARCA:GLD)

Charts created by themarketjournal, data provided by SAXO markets

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

GOLD seems to have started it's consolidation or possibly next leg down after a ferocious relief rally from severely oversold conditions seen in the metal earlier. The 1168 level will be key for the metal, a break of which could see the metal head toward the key 1100 level. However, if 1180 holds as support, we could see the metal move towards the expected 1233/40 target that has been expected for some time, before the next sell-off.

Trading strategy:

Our strategy at this juncture is to wait for a test of the 1180 support level which we think could be seen as soon as this coming week. We will be watching our oscillators to decide if we should go long at the 1168/80 level.

WTI OIL (USO)

Charts created by themarketjournal, data provided by SAXO markets

Key Levels
Support: 52.60/ 51.30/ 50.20/ 49.80/ 49/ 48.30/47.15/ 46.30/ 45.30
Resistance: 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 price action looked a little uncertain for bulls this week, though the $50.70 support level has held for this past week. We think that WTI should continue to rise from here as long as $50.70 is not broken to the downside. A break of $50.70 would indicate a test of $48.60/49 to the downside before the next move up.

Trading strategy:

WTI traders who went long around $51.50-$51.76 should have a stop around $50.65. Should the stop be triggered, we would look for long positions at the $48.60/$49 level with a stop at $47.50. For more updates throughout the week, do join our mailing list.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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