USD Trading Outlook (31-01-2014)

Currencies

• A stronger dollar pushed the euro (EUR) lower as the pair moved below 1.3543 in early trading. The single currency may come under stress today as Eurozone price data are released this morning.

• The US dollar (USD) managed to touch 102.92 against the Japanese yen (JPY), before correcting to 102.47 in early trading. The pair has strong support at 101.99.

Equities

• UK equities are on a bullish run late this week, with the UK 100 (FTS) at 6505 from 6430 on Thursday. Overall stocks have corrected their all-time highs from 6815 earlier this month.

Commodities

• WTI crude (OIL) fell from its month high at 98.55 deemed too high for the market. The energy fell to 97.79 in early trading as investors look ahead for a firm correction.
  

Mover & Shaker with FX Options

• Gold (XAU) continued to slide after its volatile reaction to the FOMC on Wednesday. The precious metal, currently at 1242 dollars per ounce could slide lower as the dollar strengthens.

• Options traders may consider constructing a Bear Put Spread on Gold if they expect the precious metal to move lower.

• A Bear Put Spread can be constructed by purchasing an at-the-money Put and selling an out-of-the-money Put on gold.