2022-03-04 • Updated
Last week was truly unforgettable, filled with geopolitical tensions and changes of market sentiment. Russian ruble lost 40% against dollar amid sanctions from EU and US. Brent oil soared to almost $120 a barrel, a 10-year high for the commodity. Chinese stocks are near the covid crash levels. Let’s dive into the market together!
US dollar may have ended its four-month consolidation and started an uptrend. At the beginning of 2022 we noted that the US Dollar index may reach a resistance level of 103.00 till the end of the year, and it looks like the currency is heading towards the target. Combine that with rising inflation in the EU and lack of hawkish comments from the European Central Bank to get a solid bearish movement in EURUSD. The pair has broken through all major support levels (the last one was at 1.1050) and now is near 1.1000, the lowest since May 2020. Soon the US Fed will increase interest rate, and market is pricing this in. Expect the continuation of a downtrend in EURUSD at least until the hike.
Brent oil is close to the historical highs, climbing to $118.00 a barrel. Technically, the correction of an uptrend should emerge soon. There is a head & shoulders reversal pattern of H1 timeframe. Thus, XBRUSD may reach $102.00 in a matter of several days. If the supply shortages remain, oil is likely to rise higher. In this case, take profits should be placed at $120.00 and $122.00 levels. The metals are also feeling great, gaining from the economic uncertainty and inflation concerns. Gold, which is the main safe haven, is moving in a symmetrical triangle, usually a trend continuation pattern. Notice, that these triangles are tricky, so you shouldn’t enter the trade without a confirmation, which is a breakout and a retest of the trendline. In mid-term we expect XAUUSD to reach $2000 per ounce.
Stock market is recovering slowly. For example, US500 (S&P500) rose 7% from the last low but is still under the 200-daily MA. The same goes for US100 (NASDAQ), which is under heavy pressure amid high inflation and risk-off sentiment. We can be more certain about an uptrend in US stock only when both indices rise above the 200-day MA. Also, take a look at HK50, the main China stock index. It is moving in a downtrend for almost a year now and found a support at 21 850 level. If HK50 breaks below this support, we expect it to fall even lower, reaching 20 900 support level in a matter of several weeks.
During the Asian session on Wednesday, the USD/CAD pair rebounded after two days of losses, reaching around 1.3590. This uptick is fueled by a stronger US dollar and lower crude oil prices, which put pressure on the Canadian dollar. The decline in Western Texas Intermediate (WTI) oil prices to approximately $80.70 is attributed to...
Gold prices rose on Monday as the US Dollar weakened amidst speculation about potential Federal Reserve rate cuts starting in June. This weakened Dollar was partly due to improved risk sentiment pushing US Treasury yields lower. Despite facing challenges from declining yields, gold prices recovered to nearly $2,170 per troy ounce, driven by the Dollar's weakness. Federal Reserve Chair...
Canadian retail sales showed a slight rebound in February, rising by 0.1% after a 0.3% drop in January. However, this failed to fully offset the steeper decline earlier in the year, suggesting a weakening momentum in consumer spending. The increase in February was driven by gains in sectors such as sporting goods, hobby retailers, and building materials. Despite the...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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