
2022 is almost here! Of course, traders are wondering what lies ahead for the price of gold…
The end of 2018 turned out to be bullish for the Brazilian currency. Back in November, the market was not sure in the president-elect Bolsonaro’s further steps. As a result, USD/BRL was trading sideways between the 3.82 and 3.94 levels. However, the recent news made the Brazilian real stronger.
One of the main reasons is connected with the weaker US dollar at the beginning of January, as the currency was affected by the government shutdown and the dovish tone by the members of the Federal Reserve. At the same time, the updates on the pension reform in Brazil cheered the market and supported the Brazilian real. According to the news, the new government plans to save 1 trillion reals over 10 years. The whole reform is announced to take from 10 to 20 years. We anticipate the Brazilian government to suggest a model for its pension reform proposal next week. That is why it is highly recommended to follow the headlines on emerging markets.
Let’s look at the daily chart of USD/BRL.
The pair has been trading in the range bound manner between the 3.6790 and 3.7414 levels since the beginning of the week with low volatility. The rebounds from these levels may provide a good trading opportunity. If there is more positive news on the further steps on the reforms by the government and the USD is weak, the BRL may break the support at 3.6790 and target the next support at 3.6456. Otherwise, if the news disappoint the investors and the USD is strong enough, the pair will rise above the 3.7414 level towards the next resistance at 3.7704. Parabolic SAR shows a downtrend for USD/BRL, that is why the further fall is expected soon.
2022 is almost here! Of course, traders are wondering what lies ahead for the price of gold…
This week is going to be full of news from the corporate world, OPEC, FOMC, and the BOJ - tune in!
While the giant ship is stuck in Suez blocking the route for 12% of global trade, Joe Biden is about to reveal his entire spending plan, and China is coming with more retaliatory measures on the human-rights question of Xinjiang.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.
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