Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 54.76% of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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The Fed Has No Clear Rate Hike Route, Dollar Falls to 97.72

Last week, the Fed's interest rate meeting finally resulted in the first rate hike in four years. The rate hike was in line with market expectations and was also the starting point for the rate hike cycle that the Federal Reserve had hinted about recently. Powell said after the meeting that the Fed does not have a clear roadmap for interest rate hikes at present. He said the subsequent rate hikes would depend on the US economy’s recovery pace. The Fed could continue tightening its monetary policy to provide flexibility for future monetary policy.

 

Investors were left wondering what comes next as Powell did not clearly explain the timetable for raising interest rates and the Fed’s upper limit for interest rates. As a result, the dollar fell from the 99 level to the 98 level and even hit a low of 97.72. The Federal Reserve did not provide a strong signal that it would continue tightening monetary policy. So, investors have to wait and see the performance of the following US inflation and economic data, from which they can predict the direction of the next interest rate meeting. Some of the economic data expected this week include the US unemployment benefits, March PMI, and the consumer sentiment index worthy of your attention.

 

GBP extension target at 1.3267

The USD/JPY has risen for two consecutive weeks, finally breaking the 119 mark to hit a five-and-a-half-year high. The rally was mainly due to the tightening of the interest rates in the US, which boosted the dollar versus the Bank of Japan's ultra-loose monetary policy, which made the yen weaker. From a fundamental point of view, Japan's economic growth and inflation lag behind Europe and the United States, and cases of the Japanese virus variant continues to rise, slowing its economic growth. The Bank of Japan still maintains its ultra-loose monetary policy. The policies support Japan’s economic development, which indirectly affects the yen’s upside. If the Ukrainian-Russian conflict becomes more intense, the rising risk of Russian debt default may cause global stock markets to plummet, and funds may flow to the yen as a safe-haven asset. Otherwise, it is difficult for investors to expect the yen to surge. Technically, the USD/JPY pair held the 10 and 20 moving average lines at 118.82 and 118.62 on the 4-hour chart and will look to 120.15 or 120.63 as the following targets. On the contrary, if it breaks the support or tests the 10-day line about 117.27.


For the GBP, the market will focus on the February CPl, and PPl set for release on Wednesday. On the same night, the Governor of the Bank of England will deliver a speech on the annual budget, including the bank’s orientation of monetary policy and may affect the pound’s exchange rate. Technically, the GBP/USD broke the 10-day MA line at 1.3096 and regained the previous week's high of 1.3193. If the pound extends its upward trend, the next target will be the 20-day MA line at 1.3267. If the Ukrainian-Russian peace talks achieve constructive results and ease the risk aversion, European currencies are expected to rise, and the pound/dollar pair may test the 1.3400 level and the 10 and 20-week MA lines.

Last Updated: 21/03/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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