Happy Friday, traders! Are you ready to trade at the end of the week? Here’s what you need to know before you start:
Forex, stocks, oil, and gold on Feb 28 - March 4
Last week was super intense! Geopolitical turbulence made the Russian ruble the most volatile currency. Gold rose and fell by more than 8000 points each time. Meanwhile, Brent oil surged to an 8-year high above $100 a barrel. So let's get to the bottom of these events and get ready for the next trading days!
Trade ideas for Forex pairs
The conflict between Russia and Ukraine can have significant economic consequences. Russian central bank is trying to limit the advance of USD/RUB, but the pair may retest 90.00 and even get to 100.00 if the situation keeps escalating. The United States and Europe imposed sanctions on various Russian companies, but their economies will also suffer. Given this new environment, traders started questioning the belief that the US central bank would raise the federal funds rate by 50 basis points in March.
Nevertheless, the USD tested the highest levels since 2020 as traders consider it a better refuge from uncertainty than the EUR or the GBP. Therefore, demand for the US currency will stay high, like the safe JPY and the CHF. GBP/USD will remain vulnerable for a decline to 1.3200 and 1.3050 as long as it's trading below 1.3500.
The Reserve Bank of Australia probably won't hike the rate on Tuesday, so AUD/USD may remain capped by 0.7280. On Wednesday, the Bank of Canada may raise interest rates, and USD/CAD may visit 1.2600.
Oil & gold: what's next?
Fears of disruptions in commodities supply pushed oil and gas prices up. The US tried to leave the Russian oil sector out of sanctions for now. OPEC will decide its production levels on Wednesday, and the odds are that it will stick to the current plan without increasing oil supply more than planned. Still, XBR/USD already includes a lot of news, so further advance probably won't be that rapid. The price may subside towards $90 a barrel.
XAU/USD spent most of last week above $1900. It looks like traders will buy gold on the dips to hedge from global risks. As a result, the yellow metal should keep returning to $1950.
Stocks caught by volatility
The American stock market is sensitive to swings in the overall risk sentiment. US500 got hurt by the news and tested levels below 4200. Even though the price turned back up on Thursday and Friday, there's still a risk of a bearish market. To change this view, buyers need to push the index above 4400.
Elsewhere, Chinese Alibaba reported the slowest-ever growth in quarterly revenue since going public in 2014. After the news, traders will have to see whether the stock manages to remain above $100.
The first week of November promises to be eventful, as we have the Fed meeting, the BOE update, and the NFP release. Read more details here.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.