2022-07-22 • Updated
As central banks raise rates amid recession fears and companies deliver financial results, markets are super active and provide multiple trade opportunities. Let's see what awaits traders this week!
The European Central Bank increased rates by 50 basis points on Thursday. That was the first rate hike in 11 years and the biggest since 2000. EURUSD initially jumped to 1.0270, but the advance was short-lived as another drama shook the battered single currency. Italian Prime Minister Mario Draghi resigned, opening the way for an emergency election and possibly a more eurosceptic government. Now all eyes turn to the upcoming meeting of the US Federal Reserve on Wednesday, July 27. The Fed is expected to raise rates to tame inflation, although opinions differ on whether we'll see a 75- or 100-point increase. There can be no doubt that big moves will shake the Forex market. EURUSD can still make another step to parity given the uncertainty about the Eurozone's economic future.
In the meantime, if the Fed underdelivers and highlights the recession risk, USDCHF may test support at 0.96 and 0.95.
Brent oil stayed inside the downtrend channel from June highs. Softening demand in the US weighs on the price. However, supply tightness and geopolitical tensions still make traders buy oil on the dips. As long as XBRUSD stays above 96.50, it will keep trying to get to 105.00 and 110.00. Gold made a detour to $1680, the lowest level since March.
The prospect of a further rise in interest rates continues to drive flows away from the metal. Above 1730, XAUUSD can get to 1760. The next levels to watch on the upside will be 1780 and 1800. Notice, however, that it's more about selling on rallies these days.
The US stock market had a good week. Some analysts think that US500 has already put the worst behind, but much will depend on the Fed's meeting outcome. Guidance will be essential, and any softening in the rate hike outlook would be great for global growth, oil, and stocks. It's also necessary to follow Joe Biden's Covid developments.
Meanwhile, the second-quarter earnings season continues. Netflix stock managed to gain 15% as the decline in subscriptions turned out to be lower than expected. Next week we'll hear from Microsoft, Meta, Apple, and other big companies, so get ready to trade on these stocks' price swings.
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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