On Monday, the U.S. dollar rose vs. a basket of major currencies amid optimism over Trump's phenomenal tax plan. Today, markets are awaiting Federal Reserve chair Janet Yellen's semi-annual testimony before Congress, which will be her first congressional testimony during the term of Donald Trump's presidency.
Traders should pay close attention to Yellen’s testimony as she could hint on the timing of the next interest rate increase. The Greenback could touch new highs if Yellen praised the strength of the U.S. economy. The U.S. dollar index rose to 101 pips.
Although, the Greenback hit ¥114 yesterday but failed to hold at these levels, in anticipation of Yellen’s statement.
Gold prices fell yesterday to $1,225 on a strong U.S. dollar. The yellow metal could back gains once more in anticipation of Yellen’s statement and amid EU's political uncertainty.
Euro fell to $1.06 vs. USD amid concerns over “Frexit” and due to growing fears of “Brexit”. Technically, the common currency could decline further during the week and touch $1.05.
Also on Monday, Oil prices fell as much as 1%, negatively affected by a strong USD and amid concerns over growing U.S. crude production. U.S. crude settled below $53 and could face a support at $52.50.
The most important economic events:
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.