Rattled global stock markets have ended another brutal week as the banking crisis stoked fears of broader weakness in the global economy. There is a wide range of views as some feel that the chances of a big banking crisis and severe market decline have increased significantly while others worry about a looming recession.
Attention this week will be on planned central banks meetings. Major central banks, such as the US Federal Reserve, Bank of England and Swiss National Bank, are to hold monetary policy meetings this week. But the most important, as always, is America's central bank, the Federal Reserve. The central bank is expected to raise rates by another 25 bps despite the recent turmoil in the banking sector. The FED decision tends to lead to significant moves for currencies, commodities, and Indices.
On the earnings front, the companies scheduled to release their last quarter financial results this week will be Nike, GameStop, Accenture and Chewy.
Gold prices jumped to the highest level since April 2022 intensifying fears of the coming economic slowdown and driving investors toward the safe-haven metal. The precious metal is likely to remain supported over the prevailing risk-off sentiment in markets as the gold price is considered an attractive investment during times of economic uncertainty. Considering the strong bullish pressure, this week gold investors should closely monitor Wednesday’s decision by the Federal Reserve on interest rates.
The main trend is up according to the daily swing chart. A trade through $2000 will signal a resumption of the uptrend. The main trend will change to down on a move through $1955. On the upside, the first major resistance is near the $2030 level. The next main resistance could be near the $2050 level, above which the price could start a steady increase towards the 2070/80 level. On the downside, immediate support is near the $1968 level. The next major support is near the $1,955 level, below which the price might decline towards the $1,930 support level in the near term.
The dollar was sold off heavily last week, and until the situation around the US banking crisis is solved, selling in the markets will continue, and the dollar will not be able to resume growth. In general, the situation for the dollar is still unfavourable. For the dollar this week, the main event should unfold on Wednesday, when Federal Reserve will offer new benchmarks to the market.
Technically the overall sentiment remains bearish. However, a fresh demand for Dow can be anticipated once the pair rises above the 104.30 key level. In this case, the pair could re-test hourly 200-SMA located near the 104.60 level. On the other hand, the next immediate support prevails at 103.30, a further breakout of 103.30 can lead the index towards 103 and 102.70 levels.
EUR/USD continues to fluctuate within the range of 1.0520/1.0700. Although there was a slight rebound, it is clear that traders remain undecided on where to go, which attracts abundant attention from speculators. During the last week, the European Central Bank raised interest rates by 50 basis points as promised. For this week, the main drivers for the Euro remain the movement of the US dollar and PMI data from Germany and the Eurozone.
This week, the key resistance is located above 1.0750, a break above this level will confirm a possible move to 1.0800 and 1.0830. On the downside, any meaningful pullback now seems to find some support near the 1.0600 zones, below which the slide could further get extended towards the 1.0560 and 1.0530/10 regions.
The previous week ended with another wave of selling in stock markets. A new wave of selling was initiated after shares of Credit Suisse hit a new record low as the bank's top shareholder ruled out any further liquidity injections. Dow Jones and other US indices extends the losses and pointed to a negative start to a new week. Moving ahead, Dow is expected to remain under pressure this week by the banking sector turmoil as investors reduce their risk exposure.
Technically the overall momentum remains bearish. For this week, the key support remains near 31,400. In case it breaks below this level, it will head towards the next support level which is located at nearly 31,000 then 30,600. On the flip side, the first resistance at 31,900/32,050 any break above this level will open 32,500 minimum.
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