Market Crash Incoming?
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.
USD Rallies ahead of Inflation Rate
Latest news
- Traders await the US Inflation Rate report today at 15:30 GMT+3. The hotter inflation is, the higher the possibility the Fed will tighten the policy soon. If it is the case, it will be positive for the USD.
- European Economic Sentiment fell short of analysts' expectations: 42.7 vs the expected 55.3. It pressed down the already fragile euro. EUR/USD has approached 1.1700.
- The US Senate has passed a $550 billion infrastructure plan, sending the legislation to the House for a vote. The main winners of the bill are materials, industrial sectors, and electric-vehicle cars. Besides, it has improved the overall market sentiment. As a result, the S&P 500 has made a fresh record on Tuesday.
- Hong Kong extended social-distancing restrictions until March. China also experiences a fresh outbreak is also growing in China. However, investors believe Asian economies will cope with these problems. The Hang Seng Index (HK50) is gradually rising.
- Crude oil retreated from a three-week low on thoughts that the global demand recovery will remain strong despite the fast-spreading delta strain.
- Bitcoin is rallying up! It has jumped above $46,000, clearing the way up to $50,000.
Technical outlook
EUR/USD is sharply falling. It gets closer to the psychological mark of 1.1700. It may struggle to cross it on the first try as it has failed to break it in March. However, if it manages to break it, it will drop the November lows of 1.1600 – just above the 200-week moving average. The 200-week MA may stop the pair from further falling. Resistance levels are the psychological mark of 1.1800 and the high of August 4 at 1.1900.
Gold has reversed up from the $1730 support level which lies at the 100-week moving average. The jump above the high of late June at $1780 will push the pair to the 100-day moving average of $1800. On the flip side, the move below $1730 will press down to the recent low of $1680.
Our forecast was right and USD/JPY is edging higher to the psychological mark of 111.00. The breakout above it will push the pair up to the high of July 2 at 111.50. However, we should be ready for a pullback from 111.00 at first. Support levels are 110.50 and the 50-day moving average of 110.00.
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