What lies ahead for gold?
As you must already know, the direction of Gold is mainly dependent on the Price action of DXY (US Dollar index). So first, we take a look at the US Dollar index.
Euro May Start a Rally
2021-10-29 • Updated
On October 28 European Central Bank held a press conference. Inflation has hit Europe and now the time has come for more profound steps in the fight with the post-pandemic economy. What should we know to trade these events?
What’s with the news?
The central bank had announced in September it would be buying fewer bonds off the back of surging consumer prices. For now, ECB decided to keep interest rates and its monetary policy unchanged despite ongoing inflationary pressures. Inflation in the eurozone hit 3.4% in September, representing a 13-year high.
Some market participants believe the ECB is underestimating current inflationary pressures and will therefore likely have to announce a rate hike before the start of 2023. But Lagarde said that the rates won’t be hiked anytime soon and that their anticipation and their analysis on the economic situation is correct.
Moreover, if to speak about the US, rate hikes may come in the States way earlier. Inflation in the country has already hit 5.4% and doesn’t plan to stop. If so, USD may rise significantly against EUR.
What’s with the euro?
The currency is in a precarious position. Although the falling wedge had been broken, which is quite bullish, lots of moving averages are ahead and the fundamentals are multidirectional. Nevertheless, if the EUR/USD pair overcomes the resistance at 1.17, then 1,18 will be the next stop.
EUR/USD daily chart
Resistance: 1.170; 1.180
Support: 1.158; 1.150
For the EUR/JPY pair, the figure is similar. While yen is weak amid QE continuation, euro may surge higher to the resistance at 134.4. But be aware of possible divergences on the RSI oscillator, they can help you to spot the upcoming reversal.
EUR/JPY daily chart
Resistance: 134.4; 135.0; 142.0
Support: 131.6; 130.8; 128.0; 127.0
Similar
What Does the CPI Have in Store?
On January 12, the Bureau of Statistics will publish the Consumer Price Index (CPI) figures, a key index for determining interest rates. While we await the release, experts forecast a decline in the CPI data, a hint at weaker Dollar values in the global markets.
TRADE IDEA: What's Next for Yen Crosses? - 27-12-2022
The trend in the scenario above is clearly bearish. We have also had a recent break of structure at the marked horizontal arrows, which means we can expect price to react from the supply zone that broke the structure.
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European Currencies Ahead of the Banks' Statements
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
Will the FOMC Surprise the Markets?
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
What awaits the Oil Market in February?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
