The USD managed to claw its way back to resistance as the broader markets continued to sell-off sharply.
Despite the half day in the US, equities continued to tumble dragged lower by the energy sector and the mining and material names.
Oil had a huge tumble and is now back trading at the $50 handle. The US is continuing to expand its oil shale oil production and is now officially the world’s largest oil producer, overtaking Russian and Saudi Arabia.
Later this week, world leaders will meet for the G20 in a bid to discuss some of the key events of the day, including world trade and climate change. Both issues will be tough to crack, given US President Trump’s stance on both. However, a fair amount of negative news is already priced into the market.
Bitcoin continue to fall over the weekend, as it managed to crack the $3,500 mark. We’ve seen a quick bounce in early Asian trade and price is now back at $4,000.
There are a number of major events on track for this week, including US GDP and the FOMC minutes. With equities in particular on a knife’s edge, it looks like it is going to be a very big trading week.
The USD Outlook
The DXY is now just below the resistance level of 97.00, having traded in a range between 96.00-20 and 97.00 throughout the shortened week.
With a risk-off feel still lingering around, I suspect the USD will remain with a bit of a bid.
97.70-97.80 remains overhead resistance and we could well see some buying if we get a strong GDP number and also a hawkish FOMC.