Dollar Regains Strength, Controls Markets

U.S. Dollar Index (USDX)

US Dollar Index chart on 21 January 2023

The dollar index recovered from negative trading for three consecutive weeks and rose by 0.7%, as it reduced its losses with the expectations of raising interest rates by the Federal Reserve at its next meeting. The Fed is expected to raise 25 basis points on interest rates, and investors will look for any new indicators regarding the number of possible increases during this year.

The dollar index succeeded in surpassing the pivot point at 101.40 levels. The MACD and RSI indicators show positivity, with the crossing of the moving average 100 and 200 on the hourly time frame, which could push the dollar index to higher levels.

Pivot Point: 102.07

Resistance Level	Support Level
102.40	101.85
102.55	101.60
102.88	101.50

Euro (EURUSD)

Today, the euro receives very important data issued by Germany, France, Italy and the European Union, on top of which are inflation data, the unemployment rate in Germany, and the GDP data of the European Union. This data will be issued before the European Central Bank meeting scheduled next Thursday to set interest rates and chart a path for potential rate increases during this year. Yesterday’s data showed a contraction in growth in Germany and an increase in the level of inflation in Spain. The euro rose against the dollar, but soon fell thanks to the strength of the US dollar.

The EUR/USD pair failed to maintain its gains after conducting an intense sale around 1.0910 levels, and the pair fell below 1.0850 levels, after the dollar index showed an excellent recovery. Moreover, the positive momentum of the MACD and RSI indicators was reversed to negative pressure, which paves the way for a further decline. On the other side, the success of the pair in breaching the pivot point and consolidating above it may give the price an upward push.

Pivot Point: 1.0850

Resistance Level	Support Level
1.0885	1.0833
1.0930	1.0800
1.1000	1.0765

Spot Gold (XAUUSD)

The price of gold declined with the US dollar gaining strength due to the caution surrounding the Federal Reserve meeting in an attempt to avoid any surprises that might be issued there. The investors will focus on monetary policy expectations, as the recent economic data from the United States indicated that the Bank may have enough room to raise interest rates significantly. It is expected that the combination of high interest rates and high inflation will affect economic growth this year, which increases the risk of an economic recession, and this will be a lifeline for gold as a safe-haven.

Gold price fluctuates slightly negatively and tries to surpass the EMA 100 on a 4-hour timeframe, to keep the price under pressure and target testing the main support point at 1,911 levels, and negativity appears on MACD and RSI indicators, which pressures the price and causes it to incur additional losses. On the other hand, the price’s success in breaching the pivot point and holding it there may help gold retain its luster and resume the rise that lasted for five consecutive weeks.

Pivot Point: 1,935

Resistance Level	Support Level
1,943	1,911
1,950	1,900
1,965	1,880

WTI Futures (CL-OIL)

Oil prices fell by about 2.25%, continuing their losses due to the possibility of major central banks raising interest rates, which affects demand. Meanwhile Russian oil exports remained strong, and the markets were under pressure due to the strength of Russian supply despite the European Union’s embargo and the Group of Seven imposing a price cap on Moscow. The meeting of the Organization of the Petroleum Exporting Countries with Russia, known as (OPEC +), scheduled for Wednesday, will be the main focus, as the market will monitor any changes in production policy by the organization and any information on global supply and demand strength.

The price of US crude fell by about $2.5, starting from yesterday’s trading, to touch $77.5 levels, with pressure from sellers, in addition to the presence of strong negative momentum on the technical indicators, which keeps the price under pressure until any positive news is released to save the prices.