The US Dollar Index continues consolidating around 96 points. SP500 has been hovering in a narrow range between 2410-2450 points near the 50-day moving average.
The main event of the Asian trading session was a speech by Bank of Japan's Haruhiko Kuroda, who pointed out that there was a moderate economic expansion, however stimuli were still needed. In addition, negative statistics was at play against the yen today. Data on Japan's current account were released. Japan's surplus decreased to 1.4 trillion yen. Also, core machinery orders dropped by 3.6%.
The Japanese yen has been basically decreasing against G10 currencies. The yen keeps on falling particularly against the US dollar and today USDJPY quotes have gone above 114. The 115 target is in plain view. A start of a reverse movement is possible near this level, as a correction.
The Canadian dollar was a hero of the day on Friday amid good data on labour market. The unemployment rate decreased to 6.5%, the number of employees in Canada increased by 45,000 versus 10,000 forecast. On top of that, PMI increased to 61.6 points. The loonie showed a particularly strong rise against the greenback, where statistics were neutrally negative. Data on average hourly earnings (m/m) decreased by 0.2%, the unemployment rate rose to 4.4% in June, but non-farm payrolls rose by 222,000 in June. Today, the USD/CAD currency pair has been correcting.
Other currency pairs - EUR/USD, GBP/USD - have been generally consolidating within Friday's ranges.
There is a sale now in the commodity market. Metals are decreasing, specifically gold reached a target at $1204 per troy ounce and started a correction. We'd recommend you to consider long positions with the first target at $1240 per troy ounce, where the 50-day moving average is crossing.
Oil keeps on falling. Last week, investors decided to draw their attention foremost to a 1% increase in US oil production and data from Baker Hughes, which showed an increase in oil production activities. The number of oil rigs was record-high since mid-April 2015. Meanwhile, crude oil inventories dropped.
From a technical perspective, Brent is at the 46-45 level, where a consolidation may start. A monthly IEA report will be among this week's important events for oil prices.
The Russian currency is still being under pressure of external circumstances. Apart from general market factors associated with tightening of monetary policies by world's central banks, the ruble is being affected by a decrease in oil prices.
In the current situation, the Russian currency can seek support, in our opinion, for now only in a correction in the oil market, and perhaps in changes in the political climate, considering the meeting between the US and Russian leaders at the G20 summit. A dialogue between the two countries may begin and in the prospect their relations might start improving.
From a technical perspective, the USD/RUB currency pair is standing still near the 60 level. A further scenario will depend on this level. If quotes go beyond this level, then the target will be at 62. For now, in our view, it is a medium-term limit. The nearest support is at the 50-day moving average area near 58. For EUR/RUB, the target is at 70, however considering a significant rise, prices may start a correction in the near prospect.
This week's focal event is going to be data on US inflation.
Ivan Kapustyanskiy, equity analyst at Forex Optimum