This week all the eyes will be on Powell when the FED makes its rate statement. Inflation is at a 40-year high! so he will definitely face a lot of questions on the plan ahead.
Currently, inflation is officially at 8.6% according to last week’s CPI figures.
The S&P 500 dropped 3% on Friday with the inflation fears as money has flown into the safe haven $.
We saw GOLD shoot up 500 pips due to this although it is still in a range.
What is also interesting is that the yield curve is also flattening. The 2-year yield rate has reached closer to the long-duration yields, like the 10-year.
If the 2-year were to move above the 10-year yield, the curve would be inverted, which is a recession signal.
Remember when Powell said last year that inflation would go away by the start of this year. Well, he quickly changed that a few months later saying it would be transitory, and then eventually said it would stay a little longer.
Now US President Joe Biden has said the same and warns that the US inflation could “last for a while”
The BIG event of the week is the FOMC on Wednesday. I would advise not to open any new trades and close if any as anything could happen.
Then on Thursday we have the Bank of England also having their rate statement so make sure to not open trades that morning.
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MAJORS
Remember I am looking for “A” grade trades from daily charts that I can place and then just walk away.
EUR/USD: Bias is only to short, but it is miles away from my A grade short. You can watch the 1.0650 on the 4 HR.
USD/CHF: I want to only long this pair, 0.94850 is the main area for me. On the 4 HR you could looks for opportunities at 0.96300.
GBP/USD: I only want to short. 1.26340 was the sweet spot, we have intersection of a trendline, fibs and the 55 MA.
AUD/USD: It has done a M2 breakout. I now need a pullback to 0.71600 region for a short.
USD/JPY: It is coming to an all time high it did in 2000 so very likely to reverse. However I dont swing trade but its an area to watch. Do not try to Long where it is now. I would watch 130 for a long.
USD/CAD: It is currently bouncing between 1.2800 and 1.25500. It is a pair I will watch at the open to look for a shorts at the current price.
CROSSES
NZD/CHF: worked again this week . I will watch the same area, 0.6310 to 0.6290 to short it. If it closes above the EMAS on a daily then I will start looking for longs.
EUR/GBP:I will look to short at 0.8590 on the weekly. It is also in a range between 0.86 and 0.85 so you could watch 0.8500 for a long.
EURNZD: Interesting on a weekly to short at 1.6790.
AUD/NZD: 1.0820 for a long.
As always, remember correlation!
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen:
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