Markets are pricing Feds 75-basis-points rate hike. Thus, all attention will be drawn to Powell's rhetoric regarding the next decision at the December 14 meeting. How will it affect the USD?
What to trade on June 13-17?
Information is not investment advice
Last week was intense!
The US dollar gained more than 2% against other currencies on investors' concerns regarding one more inflation wave in the United States caused by the fuel crisis. As a result, EURUSD plunged to 1.06 support, and USDJPY increased to 134. The stock market lost over 2% on Thursday as investors decided to quit risk assets ahead of the upcoming FOMC meeting on June 15. Chinese Hang Seng decreased at the end of the week as Shanghai closed seven districts for weekends for Covid testing. The oil market keeps gaining momentum due to the Russian oil embargo. As a result, XBRUSD increased above $122 and continues its journey towards $130.
The Bureau of Labor Statistics will publish the US PPI and Retail Sales numbers on Tuesday and Wednesday, respectively. Moreover, on Wednesday, the FOMC will host a meeting to discuss the future monetary policy and increase the key rate. According to analysts’ expectations, the Federal Reserve might increase the key rate by 75 basis points, due to another wave of inflation growth. In this case, EURUSD might decline to 1.0350. Otherwise, it will bounce to the 1.0550 resistance level.
An extremely high inflation rate already reduced real income by 20% in Great Britain, causing unrest among the population. On Thursday, the Bank of England will publish its monetary policy summary. If BOE doesn’t make any hawkish statements, GBPUSD might plunge to 1.2200 support and even decline to 1.2050 in case of a breakout.
The US stock indices had a rough close of the previous week due to the US dollar’s growth. However, both US500 and US100 keep trading above the critical key levels of 3800 and 11 700, respectively. Traders might consider opening long trades as long as the price stays above these levels.
Chinese Hang Seng reversed from the 100-day moving average after a 4-day rally due to the COVID-19 cases growth in Beijing. The price might return to 19 000 within a couple of weeks.
Oil, gas & metal
XBRUSD has been breaking one resistance level after another. Currently, the price has only one barrier of $124.50 before reaching $130. At the same time, XTIUSD is moving towards $124. There are a few doubts oil will hit targets as it looks like even OPEC+ doesn’t have enough power to resolve the energy crisis.
XAUUSD surprised everyone on Friday reaching the $1880 level. However, it declined at the beginning of the week. The breakout of the $1850 support level will send the yellow metal at $1830.
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