Risk Assets Ahead of Rally: What to Buy?
US100 broke through the strong resistance trendline, following July's inflation numbers on Wednesday, which were less than analysts expected…
Trade ideas for March 28 - April 1
2022-03-25 • Updated
Last week marked the consolidation for the most active assets of March 1-15 (which is oil and gold). XBRUSD was oscillating between $96.00 and $120.00 per barrel, weakly reacting to the news from both sides of the geopolitical conflict. Gold did the same with price borders at $1970 and $1900 per ounce. But next week has a lot to show, be ready to take part!
Trade ideas
Forex
The highest in 30 years British inflation can’t help but affect GBP. The country hiked rates from 0.5% to 0.75% on March 17. Logically thinking, such a tiny increase in bank rate won’t help to cool down the economy amid supply distortions. All eyes on Bank of England governor Bailey's speech on Monday, March 28, at 13:00 GMT+3. As head of the central bank, which controls interest rates, he has more influence over the nation's currency than any other person. Hawkish comments will send GBPUSD up by thousands of points, with a possible peak at 1.3500. On the macro scale, the pair is in the downtrend, so don’t expect too much from GBP except for a downtrend correction.
Oil & Gold
XBRUSD is likely to fall during next week, reaching the $100-$95 per barrel area because of the reversal pattern on the H4 timeframe. The US has less and less crude oil in its inventories, but the price is not going lower. This tells us that the US just doesn’t have enough power to shake the oil price. Oil is under control of OPEC+, which is not increasing production fast enough. After the consolidation ends, we expect XBRUSD to retest $131.00 with a possible upside breakout.
Oddly enough, gold was printing the same figure but now is about to rise further. The market understands that in times of high inflation the best assets to hold are those with low supply increases. Gold is among them, so we are waiting for a $1973 breakout and a rise to the $2000 per ounce.
Stocks
S&P500 (US500) index had the strongest rebound in years, gaining almost 10% from the bottom and hitting our earlier target at 4500. Historically, the US stock index is rising after the rate hikes start, and this time shouldn’t be different. After a slight pullback to the 4400-4300 area, we expect another bullish wave with targets at 4800 and 5000, which are new historical highs. Also, have a look at Twitter which is reversing from its low at $31.00 per share. A retest of $36.20 support line is perfect for opening a long trade.
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