Four Banks Fight Against Inflation
It will be the hottest week of September, with four central banks’ meetings, five PMI releases, and a lot to trade.
Market Outlook For February 21-25
Last week was full of surprises!
The US dollar plunged despite a better-than-expected retail sales report. EUR/USD bounced off the 1.1290 support and reached 1.1385. Stock indices traded sideways. Chinese Hang Seng lost 1.5%, while US500 and US100 remained flat. The oil market has been highly volatile during the past week. XBR/USD lost 3.65%, while WTI/USD plunged 4.5% on the news about the US reserves increase. Bitcoin did not break through $44 000 and returned to $40 000. It looks like buyers will hold the asset above this level for a while.
Trade ideas
Forex
German flash services and manufacturing PMI will be reported on Monday. EUR/USD is trading between 100- and 50-day moving averages. Therefore, traders might consider opening trades after a breakout in any direction. On Wednesday, the Reserve Bank of New Zealand will make the monetary policy statement. A more hawkish than expected statement might boost NZD/USD to 0.6800. Otherwise, the pair will decline to 0.6600. Traders will get to know the US prelim GDP and core PCE price index data on Thursday and Friday, respectively. The USD index is consolidating around the lower border of the ascending channel. Better-than-expected results might push the currency higher. As a result, USD/*** pairs will rise, and ***/USD pairs will decline.
Stocks
Next week, eBay and Alibaba will post earnings reports. eBay’s price has been declining for three weeks. If the report is much better than the expectations, the price might reverse from $46 and rise to $60. On the other hand, if the report underperforms expectations, the stock will have a lot of space to plunge. The closest support level, in this case, will be $30.
Alibaba stays under pressure. The price is consolidating between $110 and $130. It looks like buyers are not ready to give up the $110 support. That’s why even in the case of the worse-than-expected report, the price will not break lower. Nevertheless, better-than-expected results might send the stock to the sky with the closest target at $150.
Oil, gas & metals
XBR/USD is trading under the 100-period moving average for the first time since December 21. If the price does not return above, at the beginning of the week, it will plunge to $87.5. XTI/USD has a similar situation. As a result, the price might decline to $85.5 within the next week.
XAU/USD reached the global key resistance at $1900. It does not look like buyers can break it through right away. The price might correct down to $1878 first. If it breaks further down, it might meet the next support at $1850. Otherwise, the trend will continue towards $1950.
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