Fed vs. BOJ: Bullish pennant pattern emerges for gold, financial markets poised for another turbulent week
In the global financial market, every fluctuation is accompanied by endless speculation and anticipation. The unexpected rise in US inflation data, the potential policy reversal by the Bank of Japan, and the volatility of gold, the US dollar, and the global bond market have all become focal points for investors. At this unpredictable moment, the views and predictions of analysts have become the guiding light for the market. This article will take you to a deeper understanding of the behind-the-scenes of this financial storm, revealing various mysteries and suspense. Unexpected US Inflation: Market's Rate Cut Expectations Shaken The unexpected rise in US inflation data has plunged the market into an inflation battle. Analysts have adjusted their expectations for the upcoming Federal Reserve meeting, and many are beginning to doubt whether the Fed will postpone a rate cut. A senior trader at InProved precious metals stated that it is difficult to ignore the upside surprise from inflation. In the short term, there will be no new catalysts to push gold prices through the main resistance level of $2200. The Changing US Economy: The Mystery of the Fed's Policy Reversal Changes in the US economy have raised doubts about the Fed's policy. Analysts are beginning to consider whether the Fed needs to reassess its tightening plan. The head of global capital markets in North America at Validus Risk Management pointed out that the inflation data highlights that the last mile of controlling inflation in the US may not be as easy as the progress made so far. The Bank of Japan's Big Move: The Mystery of the Ultra-Dovish Policy is About to Be Revealed The Bank of Japan's policy changes have become a global focus. The market is beginning to speculate whether the Bank of Japan will exit its ultra-dovish policy at next week's meeting. Sources revealed that the Bank of Japan has begun preparations to end its negative interest rate policy. Evelyne Gomez-Liechti, strategist at Mizuho International, said that the data is in line with the Bank of Japan's wage standards. The possibility of a rate hike in March is higher. Market Volatility: Gold Prices, US Dollar Performance, and Global Bond Yields The volatility of gold prices, the performance of the US dollar, and the changes in global bond yields have created turmoil in the market. Investors are beginning to pay attention to the trend of non-yielding assets such as gold, while closely monitoring the rise of the US dollar and the performance of the global bond market. Market analysts pointed out that spot gold is expected to rebound to the $2169-2175 range and stabilize again near the support level of $2152. On the daily chart, the gold price shows a potential bullish triangle pattern. To confirm this technical pattern, the gold price needs to close above the downtrend line resistance at $2174/oz. If the gold price breaks through Tuesday's high of $2185/oz, it will open up the possibility of retesting $2195/oz, and the subsequent key upside targets are at the psychological levels of $2200/oz and $2250/oz. The 14-day relative strength index (RSI) is in the overbought zone near 70.00, indicating that there may be room for gold prices to rise. However, if the bears regain control and continue to break below the rising trend line support at $2156/oz, the gold price may fall further to $2150/oz. The static support level of $2125/oz will become a key defensive position for gold bulls. Strategic Outlook: Fed Predictions, Interest Rate Trends, and Market Reactions The market is full of anticipation for future trends. Investors are beginning to adjust their strategies to meet the upcoming changes. LSEG's interest rate probability application shows that traders have reduced the probability of the Fed cutting interest rates at the June meeting from about 75% on Friday to 61%. For 2024, the market expects less than three rate cuts, lower than the three to four cuts about two weeks ago.
Time:
2024-03-16 09:33
In the global financial market, every change is accompanied by endless speculation and anticipation. The unexpected rise in US inflation data, the potential policy reversal by the Bank of Japan, and the volatility of gold, the US dollar, and the global bond market have all become focal points for investors. At this unpredictable moment, the views and predictions of analysts have become the guiding light for the market. This article will take you to a deeper understanding of the behind-the-scenes of this financial storm, revealing the various mysteries and suspense within it.
US Inflation Surprise: Market's Rate Cut Expectations Shaken
The unexpected rise in US inflation data has plunged the market into an inflation battle. Analysts have adjusted their expectations for the upcoming Federal Reserve meeting, with many questioning whether the Fed will postpone a rate cut. A senior trader at InProved Precious Metals stated that it is difficult to ignore the upside surprise from inflation. In the short term, there will be no new catalysts to push gold prices through the main resistance level of $2200.
Turbulence in the US Economy: The Mystery of the Federal Reserve's Policy Reversal
Changes in the US economy have raised doubts about the Federal Reserve's policy. Analysts are beginning to consider whether the Fed needs to reassess its tightening plan. The Global Head of Capital Markets in North America at Validus Risk Management pointed out that the inflation data highlights that the last mile of controlling inflation in the US may not be as easy as the progress made so far.
The Bank of Japan's Big Move: The Riddle of the Ultra-Dovish Policy is About to Be Revealed
The Bank of Japan's policy changes have become a global focus. The market is beginning to speculate whether the Bank of Japan will exit its ultra-dovish policy at next week's meeting. Sources revealed that the Bank of Japan has begun preparations to end its negative interest rate policy. Evelyne Gomez-Liechti, strategist at Mizuho International, said that the data is in line with the Bank of Japan's wage standards. The possibility of a rate hike in March is higher.
Market Waves: Gold Trends, US Dollar Performance, and Global Bond Yields
The volatility of gold prices, the performance of the US dollar, and the changes in global bond yields have created waves in the market. Investors are beginning to focus on the trends of non-yielding assets such as gold, while closely monitoring the rise of the US dollar and the performance of the global bond market. Market analysts point out that spot gold is expected to rebound to the $2169-2175 range and stabilize again near the $2152 support level.
On the daily chart, the gold price shows a potential bullish triangle pattern. To confirm this technical pattern, the gold price needs to close above the downtrend line resistance at $2174/oz. If the gold price breaks through Tuesday's high of $2185/oz, it will open up the possibility of retesting $2195/oz, and the subsequent key upside targets are at the $2200/oz and $2250/oz psychological levels.
The 14-day Relative Strength Index (RSI) is in the overbought zone near 70.00, indicating that there may be room for gold prices to rise. However, if the bears regain control and continue to break below the rising trend line support at $2156/oz, the gold price may fall further to $2150/oz. The $2125/oz static support level will be a key defensive position for gold bulls.
Strategic Outlook: Federal Reserve Predictions, Interest Rate Trends, and Market Reactions
The market is full of anticipation for future trends. Investors are beginning to adjust their strategies to meet the upcoming changes. LSEG's interest rate probability application shows that traders have lowered the probability of a rate cut at the Fed's June meeting from about 75% on Friday to 61%. For 2024, the market expects less than three rate cuts, down from three to four about two weeks ago.
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