Some traders were away yesterday due to Columbus Day in the US, though the stock market remained open while the bond market was closed. The most important event this week will likely be the ECB interest rate decision on Thursday, but before that, we have UK, CAD and New Zealand inflation reports. In the US, the key focus will be retail sales and a few FOMC speakers.
Regarding the markets, we saw some nice recovery in stocks last week, and this trend could extend further into the start of this week. It could also mean that sooner or later, the US dollar may enter a corrective phase, as discussed last week. We mentioned that the first impulse from September lows is likely facing resistance around the 103 level on the Dollar Index so pullback wouldn’t be surprising. In such a case, the 101.80 to 102.30 zone will be key support to watch for a potential new resumption higher.
Despite bullish dollar, gold seems ready for more gains. But not crude, this one is about to turn.
Grega
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