Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
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.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Several economic occasions happened after Russia’s invasion of Ukraine…
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on May 27 at 15:30 GMT+3.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.