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Weekly Market Analysis: 7 March 2022


What happened in the market last week?

• Two central banks announced their interest rates: the Reserve Bank of Australia remained at 0.1%, and the Bank of Canada at 0.5%. The Central Bank of Canada also said that it sees the possibility of another 50bps rate hike later in the day.

• In the US, positive non-farm data raised market expectations for a rate hike by the feds, but in his testimony, US Federal Reserve Chairman Jerome Powell said a 50bps rate hike was unlikely. He also said a 25 bps hike was more likely to control economic conditions given the high inflation in the US.

• The market’s main focus remains on the heightened war tensions between Russia and Ukraine, with news that Russia is targeting a nuclear power plant in the Ukraine Region, sending the market into risk-off mode.

What to focus on this week?

In the next week, the focus will still be on tensions between Russia and Ukraine, especially in negotiations between the two sides. The conditions of war against the people of the two countries and news regarding the latest conditions still have to be watched by the market.

In addition, several data releases must be considered, especially those related to inflation and financial policies from several countries. This week, there will be interest rate policies from the ECB and CPI data from the US, which can be used as essential data in seeing the potential market reaction to the market.
US Fed Chair Jerome Powell said raising interest rates to 50 bps is difficult. However, if the CPI data spikes again, it will further pressure policymakers to rethink their decisions.

USD Index

This week’s USD Index opened with a surge by chasing the figure higher up to 99.21 before experiencing another correction to enter the resistance area at 98.47-98.83. This is quite interesting because if the market breaks through and stays above 98.83 again, the USD Index may continue to strengthen.
In the H4 timeframe, it is evident that the USD Index trend is strong to continue strengthening to higher levels.

The next target in the USD Index is towards the area of ​​99.54-99.82.

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After almost two years of not reaching the 2000 level, Gold opened with a high spike today until it reached the 2000 level before experiencing a correction. Technically, Gold opened above the resistance area from 1953-1974 and is expected to continue towards the target at the 2002-2017 level.

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