Weekly Market Analysis: 14 March 2022

　　

What happened in the market last week?

• The market sentiment moved back to risk on condition, where the war condition is slightly calm. Meanwhile, the market switched its focus to central banks and inflation conditions. 
• Two central banks showed positive notes, where Reserve Bank of Australia Governor Philip Lowe mentioned raising interest rates, which resulted in the much stronger Australian Dollar. In Europe, even though the European Central Bank kept the rates unchanged, they also mentioned that they would stay flexible while following the conflict in Ukraine.
• Lastly, the US CPI showed a rise in inflation, which potentially will cause the Fed to hike the interest rate for this week. 

What to focus on this week?

This week, the focus of the market will be more inclined to the FOMC meeting, with the potential for the Federal Reserve to raise interest rates by 25bps, considering inflation conditions are getting higher, with the view that a 50bps increase is still possible. In addition, the Bank of England will also determine its monetary policy with the potential to increase interest rates by 25bps.

In addition to the decision from the Central Bank, there are also some crucial data to watch out for, including the PPI data, Retail Sales data from the US on Tuesday and Wednesday, CPI data from Canada on Tuesday, New Zealand’s GDP, and Labor Data from Australia.

In addition, we still must pay attention to the meeting between Russia and Ukraine to keep getting the latest updates on the state of the conflict between the two countries.

USD Index

After showing its strength again last week, the USD Index looks to be strengthening slightly before returning to consolidative levels.

The closest resistance area on the weekly Timeframe is between 99.54 – 99.82. The key moves will be on Tuesday and Wednesday when the PPI and Retail Sales data are released, but the focus remains on how the Federal Reserve will raise interest rates.

In the H4 Timeframe, there is a lower resistance level, namely 99.24 – 99.40. The potential for movement is seen when the USD Index drops slightly before seeing the results of the data and the FOMC meeting. 

Gold

Gold almost touched its all-time high at 2075 but held back at 2070. After conditions eased slightly between Russia and Ukraine, Gold returned to consolidative mode and to the area between 1974 and 2002.
If you look at the weekly Timeframe, the gold price fell below the 2002 – 2019 area and formed a long shadow above.

Meanwhile, on the H4 Timeframe, the price is trying to penetrate the 1974 support area and reach the next support level in 1953.

This week’s potential is seen as the potential for Gold to fall again towards the 1953 area with pressure to enter the consolidative area between 1916 and 1953 if war conditions improve and the Federal Reserve raises interest rates.