What to Trade on August 22–26?
How Energy Crisis Affects German PMI August 23, 2022, 10:30 GMT+3 Germany will publish Flash Manufacturing PMI data on Tuesday, August 23, at 10:30 MT time (GMT+3)…
Pound rallies, Treasury yields are at one-year record high
Latest news
- 10-year Treasury yields rose to the highest level in almost a year. Some investors concern about rising yields and have doubts over the reflation trade, which can push yields up to a level that can hit risk appetite.
- UBS: “We are still in a risk-on environment. Everybody is playing out the outlook for better economic growth, the outlook for more fiscal stimulus. It’s normal that nominal yields are trending higher, equities are also trading high, and also commodities based on a better economic outlook”
- The Bill & Melinda Gates Foundation Trust exited positions in Alibaba and Uber and halved the stake in Apple.
- Bitcoin dropped from record highs on Monday. According to JPMorgan: a serious risk to bitcoin could be a “sudden loss of confidence” in Tether (USDT).
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Gold is trading at the lowest levels for this year - below $1 800.
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Riskier currencies such as the GBP, NZD, and AUD skyrocketed to multi-year highs.
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Oil tries to rebound from its previous week's losses.
Technical analysis
EUR/USD has approached the resistance at both the 50-day moving average and the 50.0% Fibo level at 1.2150. It will have struggles to cross it, but if it manages to do so, the way up to the 61.8% Fibonacci level at 1.2200 will be clear. Support levels are 1.2100 and 1.2030.
The pound’s rally is unstoppable. After the breakout above 1.4000, GBP/USD has taken a break. If it manages to jump above the intra-day high of 1.4050, the doors towards 1.5000 will be open. Support levels are at the recent lows of 1.4000 and 1.3950.
USD/JPY is moving inside the ascending channel. The way to the psychological mark of 106.00 is clear. If it breaks this resistance, it may rise to the next round number of 106.50. Support levels are at Friday’s low of 105.40 and 105.00.
Gold is getting closer to the key psychological mark of $1 800. It’s unlikely to cross it on the first try, but if it does, the way up to the high of February 16 at $1 825 will be clear. On the flip side, the move below the recent low of $1 775 will drive the yellow metal to the next support of $1 760.
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Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
FED and BOE Make Another Attempt to Beat Inflation
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Will the UK and US Cope with Inflation?
Every week we expect many interesting events that can shake the market.
