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Currency market weekly Outlook

Previous Week

The Yen, gold and oil shined well in the previous week on geopolitical risk. The escalation of tension in the Middle East after the US killed a top Iranian Military general. President Trump threatened to hit 52 Iranian sites if Iran retaliates.

DXY declined slightly after a minor jump till 97.11 on USDJPY sell-off. It hits a low of 96.36 previous weeks and currently trading around 96.81.

The major economic data from the US was the ISM Manufacturing index which has contracted at 47.2, the lowest level since 2009.

The precious metal was the best performer in 2020 especially Gold jumped more than $50 on an increase in demand for Safe-haven assets.

US 10 year bond yield has lost more than 9% from temporary top 1.948%. The spread between US 10 year and 2 years has narrowed to 25 bps from 35.7 bps

Weekly Technical:

EURUSD:

Major trend reversal level- 1.12860

Near term support- 1.1100/1.10350

Near term resistance – 1.1245/ 1.12885

USDJPY:

Major trend reversal level- 107.20

Near term support- 107.20/106.40

Near term resistance – 108.80/109.75

USDCHF

Major trend reversal level- 0.9645

Near term support- 0.9645/0.9540

Near term resistance – 0.9770/0.9845

USDCAD

Major trend reversal level- 1.29290

Near term support- 1.29290/1.2800

Near term resistance – 1.3025/1.3100

Gold

Major trend reversal level- $1600

Near term support- $1550/$1515

Near term resistance – $1600/$1625

WTI Crude

Major trend reversal level- $65

Near term support- $63/$61.45

Near term resistance – $65/$66.80.

Major Economic events for the week

US ISM Services – Tuesday (3:00 pm GMT)

US ADP employment - Wednesday (1:15pm GMT)

BOC Gov Poloz Speaks –Thursday ( 7:00 pm GMT)

US Non-Farm employment change –Friday (12:30 GMT)

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