Non-farm Payrolls legacy leaves the dollar bulls back in control

Markets may be looking to pause for breath after several days of higher drama and volatility last week. The legacy of the European Central Bank actions (or should that be inaction?) and also the solid Non-farm Payrolls report has meant that traders are still trying to work out where the euro and dollar should be valued. However as markets settle down this week there should be a positioning of dollar strength once more as expectations of a rate hike by the Federal Open Market Committee at next week’s meeting seem to now be assured. It would appear that markets look to be priced for certainty, but there again they clearly went too far in the run up to the ECB monetary policy decision, surely they are not going to make the same mistake with the Federal Reserve too! The impact on markets has been significant and we try to make sense of it all as the dust settles.

What are the key factors driving markets this week and how are traders going to interpret one of the final pieces of key tier one US economic data in the run up to the crucial Fed meeting. What are the forex markets positioned for and what is the outlook for major pairs? There is also a technical analysis of the key Euro/Dollar and Dollar/Yen pairs. How are equity markets looking in the wake of the lack of extra quantitative easing from the European Central Bank? There is a technical analysis of the FTSE 100 and the German DAX Xetra. And also what about key commodity markets with such a big swing in the price of gold, whilst the oil price also reacts to the OPEC meeting last week. What can we take away from the bond markets which have reacted so violently in the wake of the ECB meeting? What is the technical analysis of Gold and Brent Crude oil telling us?