Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
US Dollar: It Is Time To Hedge
2021-07-19 • Updated
What is happening?
During June 2021, the US dollar index has gained 2.3%, which is the biggest run since March 2020. The main reason for the greenback’s growth is FOMC’S June meeting, where US officials signaled that they expect rates to climb already in 2022. Then, Chairman Jerome Powell mentioned that the central bank started to talk about economic stimulus reduction.
Overbought is the other fact that makes investors to hedge their positions in the stock market. S&P500 gained 101% since March 2020 crush, Nasdaq grew by 125% in the same period. Regular investors are extremely scared and ready to fix their profits since fears about rising inflation could push the central bank to raise the key rate.
At the moment, the US dollar index is showing an opposite correlation with Treasury yields. The same scenario had happened last year but oppositely. Investors betted on the currency falling while yields moved higher in anticipation of economic reopening.
What about Bitcoin?
Risk assets can get under pressure while the US dollar is strengthening. As one of the most speculative assets, Bitcoin boomed against the greenback by 2000% after March 2020 might be in danger. It already dropped by 50% from its record high of about $65.000.
Meanwhile, some analytics relate to the position that Bitcoin might keep its growth after overcoming worries related to the recent China crypto mining ban.
How to trade?
US Dollar Index Daily chart
On the daily chart, reversed “head-and-shoulder” has been formed with an estimated target at the level of 97. As soon as the price breaks the resistance at the level of 93.5, it will head towards the main target. This move allows the US dollar to appreciate by 4.5% against a basket of currencies.
As an example, let’s look at the weekly chart AUDUSD.
US dollar index growth will lead the price to fall with targets at 0.725, 0.712, 0.7, and finally 0.68.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
Let's dive into the world of gold. Currently, the price of gold, represented by XAUUSD, is stuck in indecision, hovering around the $1,975 mark. The market is anxiously awaiting two important factors: the release of the Federal Reserve's meeting minutes and the extension of the US debt ceiling.
Hey guys, this is the last full trading week in May, and many forward-looking individuals like myself are already preparing themselves to seize whatever opportunities June may have in store. On this note, I will review a few commodities that have satisfied my quest for swing-trading opportunities in the coming month. Follow me!
The Bank of England (BoE) has dramatically shifted its economic forecasts. They no longer expect a recession in the UK and have upgraded their growth projections. This year, the BoE predicts GDP growth of +0.25%, a significant improvement from previous expectations. Next year's forecast is even more optimistic, with a projected growth of 0.75%.