1. Forex Market Insight
EUR/USD
The fine-tuning of the ECB’s wording sparked concerns about a shift in monetary policy. Despite record high inflation in the euro area, the European Central Bank held a monetary policy meeting on the 3rd and decided to keep monetary easing efforts unchanged.
Therefore, the European Central Bank continues to maintain the current monetary policy. However, the fine-tuning of the relevant wording has released a “hawkish” signal, which will bring greater volatility to the financial market trends.
Judging from the published monetary policy resolution, the ECB continues to stay put, but the wording “stand ready to adjust all of our instruments, as appropriate, to ensure that inflation stabilizes at its two percent target over the medium-term” was removed.
At the same time, the European Central Bank President Lagarde said at a press conference that day in response to questions about the prospects for interest rate hikes during the year, the ECB’s decision will be based on data.
The last time she faced a similar question, Lagarde stressed that the prospect of a rate hike in 2022 is “very unlikely”.
This fine-tuning of attitude was interpreted by investors as the ECB no longer ruled out the possibility of interest rate hikes within the year, and the policy tone is changing from “doves” to “hawks”. With this, the financial markets immediately experienced greater volatility.
Thus, in the context of persistently high inflation and the Fed’s increasing expectations of interest rate hikes, the pressure on the ECB to withdraw from its loose monetary policy is increasing day by day.
Technical Analysis：
(EUR/USD 1-hour chart)
Execution Insight:
Today, we will pay attention to the support strength of the 1.1378-line. If the euro runs steadily above the 1.1378-line, we will pay attention to the suppression strength of the two positions above 1.1501 and 1.1535.
GBP Intraday Trend Analysis
Fundamental Analysis：
The Bank of England raises its benchmark interest rate to 0.5%. The Bank of England, the central bank of the United Kingdom, announced on the 3rd to raise the benchmark interest rate from 0.25% to 0.5%.
The minutes of the Bank of England meeting released on the same day showed that the UK’s current labor market is tight, and there are signs that domestic cost and price inflation pressures will be more persistent, so it is necessary to raise the benchmark interest rate by 0.25 percentage points.
The central bank expects the U.K. consumer price index (CPI) to continue to rise in the coming months and peak at 7.25 percent in April, higher than previously forecast.
The Bank of England said that if the actual economic development is in line with the current expectations, it will further moderately tighten monetary policy in the next few months.
Technical Analysis：
(GBP/USD 1-hour chart)
Execution Insight:
The pound is mainly concerned about the 1.3522-line today. If the pound runs above the 1.3522-line, it will pay attention to the suppression strength of the 1.3574 and 1.3669 positions. If the pound runs below the 1.3522-line, it will then pay attention to the support strength of the 1.3450 and 1.3409 positions.
2. Precious Metals Market Insight
Gold
Fundamental Analysis:
On Friday, gold prices bottomed out and then closed slightly higher, as growing concerns about inflation helped cushion the pressure from a stronger dollar and rising U.S. bond yields, following the release of unexpectedly upbeat U.S. jobs data.
In addition, the Ukraine crisis continues to provide support for gold prices. This week’s focus is on the U.S. CPI for January.
Technical Analysis：
(Gold 1-hour chart)
Trading Strategies:
Gold pays attention to the 1793-line today. If the gold price runs steadily above the 1793-line, then it will pay attention to the suppression of the 1812 and 1819 positions. If the gold price falls below the 1793-line, it will open up further callback space. At that time, pay attention to the support strength of the 1782-line.
3. Commodities Market Insight
WTI Crude Oil
Fundamental Analysis:
Oil prices performed strongly last week, rising by more than 5 percent to a seven-year high of $93.17 per barrel, the seventh straight weekly gain, as better-than-expected U.S. non-farm payrolls data for January and concerns remained about supply disruptions due to cold weather in the U.S. and ongoing political turmoil in major global oil-producing countries.
Technical Analysis：
(Crude oil 1-hour chart)
Trading Strategies:
Oil prices focus on the 88.45-line today. If the oil price runs below the 88.45-line, then pay attention to the support of the 85.75 line. If the oil price runs above the 88.45-line, then pay attention to the suppression of the 91.64 and 93.21 positions.
Disclaimer
While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.
