Last week was full of surprises! The US dollar plunged despite a better-than-expected retail sales report…
Stock Market Recovers, Fed Meeting Is Eyed
- A selloff in stocks stopped. S&P 500 has reversed up from the 100-day moving average. It should be the perfect time to buy the index.
- The day has started with the detailed record of the Reserve Bank of Australia’s last meeting. The bank warned about the slow rebound from lockdowns and claimed it wasn’t going to increase the cash rate before 2024. This is actually negative news for the Australian dollar. However, AUD/USD has surged at the start of the day driven by the overall risk-on sentiment.
- All eyes are on Wednesday’s Federal Reserve meeting. The US central bank is expected to start laying the groundwork for scaling back stimulus. If it hints at tapering, it will push the USD up.
- China’s assets are touching the dips driven by worries over Evergrande, the Chinese second-largest property developer by sales. The company’s stock dropped at the weekly opening by over 10%, as the company faces financial problems: its liabilities reached $305 billion.
- Gold has started recovering, ending yesterday with gains in the 1760 level. Crude oil prices are edging higher as well.
EUR/USD has failed to cross the support level of 1.1710, which it struggled to break on March 30 and August 10. Watch the breakout of 1.1750. If it happens, EUR/USD is likely to surge to the 50-day moving average of 1.1800.
Gold has reversed up from the 100-week moving average of $1755. If it manages to break above the 23.6% Fibonacci retracement level of $1770, it will rocket to the psychological mark of $1800. On the flip side, if it reverses down from the resistance level of $1770, it will fall to the low of March 28 at $1730.
USD/JPY is moving inside the ascending channel. It is likely to bounce off the lower line at 109.30 and jump to the recent high of 110.00. Support levels are 109.30 and 109.00.
Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
The volatility that the markets experienced last week promises the second tidal wave! What should your favorite assets anticipate during the first week of February?
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.
The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.