The US dollar rose on the first trading day of the month as worries of the Omicron variant failed to dampen the mood among investors. Recent data from around the world shows that the number of Covid-19 cases is rising, with most of the cases being because of the Delta and Omicron variants. For example, in the United States, the 14-day average of the cases has risen to about 401k, which is a 201% increase. However, the 14-day average of deaths has fallen by 1.4%, meaning that the new variant is milder than the others.
US futures rose on Monday as the focus shifted to the new year. Futures tied to the Dow Jones rose by 115 points while those tied to the S&P 500 and Nasdaq 100 rose by more than 0.40%. In general, stocks had a great 2021 as the S&P 500 index rose by 28%, making it the third straight month of double-digit gains. Analysts expect that the S&P 500 returns will be lower this year as the Federal Reserve starts to hike interest rates. Meanwhile, in Asia, the Hang Seng index declined by 0.70% while the Nifty 50 rose by 0.65%.
The economic calendar will have a few events today. The most important one will be the Turkish inflation rate. Economists expect the data to show that the headline consumer price index (CPI) rose from 21.30% in November to 30.60% in December. On a month-on-month basis, the CPI is expected to have risen by 9%. These numbers will be important because the Turkish Central Bank implemented three rate cuts in 2021 as inflation rose. Other key numbers to watch today will be the European and US PMI data.
EURUSD
The EURUSD pair rose to a high of 1.1387 on Friday. This was the highest level since November 15. The pair declined to a low of 1.1340, which is along the upper side of the horizontal channel shown in red. It has moved slightly above the 25-day moving average while the Relative Strength Index (RSI) has moved to 54. The pair will likely resume the bullish trend after forming a break and retest pattern.
USDCHF
The USDCHF pair rose to a high of 0.9142, which was slightly above last week’s low of 0.9100. On the four-hour chart, the pair moved to the middle line of the Bollinger Bands while the Stochastic Oscillator has moved above the oversold level. The Relative Strength Index has also moved slightly above the oversold level. Therefore, the pair will likely keep rising as bulls target the upper side of the Bollinger Bands.
XBRUSD
The XBRUSD pair was little changed on Monday. It is trading at 78.17, where it has been in the past few days. The price is slightly below the key resistance at 79.95. It also moved slightly below the 25-day moving average while the MACD and the Relative Strength Index (RSI) tilted lower. Therefore, the pair will likely remain in this range today.
