Weekly Market Analysis: 11 April 2022

　　

What happened in the market last week?

• The RBA maintained the interest rate at 0.1%. This may come as a surprise to investors given the RBA’s previous discussion of a rate hike but also its failure to move at this time.
• According to the FOMC meeting minutes, the majority of FOMC members support a 50-basis point rate rise. The move could keep the USD optimistic despite the currency’s seasonal drop.

What to focus on this week?

This week, numerous central banks will provide data and announce their interest rate decisions.

The data that requires attention comes from the US, where CPI, PPI, and retail sales data will reveal inflation conditions, which may further urge the FED to raise interest rates aggressively. 

Recently, the Fed stated that they expect inflation to decline by the middle of the year, indicating that they must be more aggressive.

Australia is slated to release employment data with a predicted growth of 30,000, providing a positive outlook for the economy down under.

Meanwhile, three central banks will announce their interest rate decisions this week, beginning with the RBNZ, which is projected to hike rates by 25 basis points to 1.25%. This is followed by the Bank of Canada, which is expected to raise rates by 50 basis points. Finally, the ECB is expected to leave rates unchanged to maintain a flexible monetary policy stance.

Market Pair Changes

BTCUSD was one of the assets that suffered a significant loss last week, falling 7.05%.

The US indices were also poorer. The DJ30 closed the week marginally lower by 0.25% from its opening price. The SP500 follows, with a 1.23% decline, and lastly, the NAS100 with 3.49%.

WTI (USOUSD) remained relatively stable with a 0.81% loss, while gold (XAUUSD) rose by 1.14%.

The USD Index (USDX) increased by 1.20%, forcing several major currencies to decline versus the USD, with EURUSD falling 1.44 percent and USDJPY rising 1.37 percent.

(All data is taken from the MT4 VT Markets).

Technical Analysis

USD Index (USDX)

USD Index (USDX) managed to break through our resistance region around 99.28 – 99.57. This strengthening suggests the potential for USDX to ascend towards the next resistance area above the 100 price level.

On the Weekly and H4 periods, it is evident that the trend is extremely strong on USDX. Therefore, it is conceivable that the price will continue to strengthen.

The support level is at 99.28 – 99.57

GOLD (XAUUSD)

Gold (XAUUSD) continues to oscillate between the Support ($1891 – $1916) and Resistance ($1965 – $1993) levels.

The lack of a massive movement was due to the lower number of reports about the conflict as well as the Fed’s meeting minutes, which did not change significantly.

On the weekly timeframe, the Support and Resistance levels remain unchanged at $1891–$1916 and $1965–$1993, respectively. 

Meanwhile, in the H4 period, the price has just been rejected from the $1949 resistance level and is now trading within the $1941–$1949 range.