The Week Ahead 📈 21th – 25th FEB

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The Week Ahead 📈 21th - 25th FEB

Hello, welcome to the Key To Markets preview of the Week Ahead.

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Contents

• Currency Pair Performance


• 10 Big Stories Last Week


• Chart of the Week


• Economic Calendar Highlights


• 5 Things to Watch this Week


• Technical Analysis: EUR/USD | GBP/USD | USD/JPY | AUD/USD | USD/CAD | Gold | Oil | S&P 500

Currency Pair Performance

5-day performance as of February 17, 2022. 18:00 GMT

Source: finviz.com

0 Big Stories Last Week

In case you missed it....

No war. There was no n invasion of e on Feb 16 as was widely reported but risks in the region are hurting market sentiment.

withdraws troops. announced it was pulling troops back from its border with e, which was disputed by the Us.

Gold reaches 8-month high. The price of gold rose to over $1900 per oz for the first time since June last year on haven flows.

WTI hits $95. The Us crude oil benchmark hit the 95 level for the first time since August-2014.

AUD top FX riser. The Aussie dollar rose most out of the major currencies last week on increased bets the RBA will raise rates this year.

Minutes sink UsD. The Us dollar lost out this week after dovish Fed minutes discouraged UsD bulls from buying the dip.

Dovish Minutes. The Fed made no specific plan for selling its bonds known as 'QT' nor had a timetable for rate hikes.

Munger: fiat is going to zero. "The safe assumption for an investor is that over the next hundred years the (fiat) currency is going to zero." – Charlie Munger

Walmart supply chain survived. The world's biggest retailer reported strong results and announced a $10 billion stock buyback.

Roblox down ¼. shares of the online gamers platform for pre-teens tanked 25% after disappointing guidance following Q4 results.

Chart of the Week

Source: Barry Ritholtz

The moment internet communications software-maker Zoom became worth more than one of the largest oil companies on the planet, ExxonMobil was remarkable and headline-grabbing in the summer of 2020. Things have changed a lot since then – Zoom is now worth 1/10th of Exxon. This chart almost perfectly represents the change in leadership in the stock market over the past few months. Dividend-paying 'real-word' companies are booming, while unprofitable 'digital' companies are getting crushed.

Economic Calendar Highlights

Source: FX Street

5 Things to Watch This Week

1)     e

Tensions between  and NATO on the border of e continue to dominate headlines and hurt investor sentiment, which has contributed to the big gains in gold. De-escalation, were it to happen, could be the catalyst for a relief rally in stocks and a near-term top in gold.

2)     Flash PMIs

Investors can take heart from the latest hard data, including Us retail sales that showed Omicron and rising prices have not hurt the economy. However PMIs will be important to see the latest evidence that this is changing, which would complicate the hawkish pivot from central banks.

3)     RBNZ

The Reserve Bank of New Zealand is expected to again raise rates this week to combat inflation and booming house prices, possibly lending some support to the Kiwi dollar, which is starting to again attract a yield advantage of other major currencies.

4)     Us GDP & core PCE

The 2nd release of fourth quarter U GDP comes out this week. The first reading showed the Us economy growing handily in Q4, capping the best year of economic growth in four decades. Naturally growth must slow once the recovery phase is over, which could make an uncomfortable mix with decades-high inflation.

5)     UK banks

Top UK banks from HsBC to Natwest to Barclays report seasonal earnings this week. The banking sector, alongside energy, has been among the best performing sectors in the stock market this year thanks to the prospect of higher interest rates and strong net interest margins.

Technical Analysis

Here you can find analysis of the major asset classes including the major forex pairs, gold, oil, and the S&P 500.

EUR/USD (H4 Candlestick Chart)

EUR/USD remains trendless inside a volatile price range. The price has retraced 50% from the high just under 1.15 and rebounded. should near term resistance at 1.14 break again it would suggest the retracement is over. However a drop back under 1.13 and the 50% Fib would imply another dip under 1.12.

GBP/USD (H4 Candlestick Chart)

GBP/USD is testing the top of a 250pip trading range. Should the price break higher and close beyond 1.3654 it would be a continuation of the rise that began after the 1.32-1.375 rally retraced 61.8%. The implication being a test and possible move above 1.375.

USD/JPY (H4 Candlestick Chart)

USD/JPY has double-topped under 116.5 and has since dropped back to 115 where the bounce formed a lower high and has now dropped back under 115 to make a lower low, implying more weakness to come. Next support lies at a rising trendline connecting the November and January lows.

AUD/USD (H4 Candlestick Chart)

AUD/USD is being supported by an uptrend line, and while above it looks on course to test the recent spike high at 0.725 and the series of highs under 0.73 made in December through January.  A drop under the uptrend line indicates a re-test of 0.70.

USD/CAD (H4 Candlestick Chart)

USD/CAD remains caught in a sideways trend. A false breakdown under range support at 1.265 did not lead to a breakout of the top of the range near 1.28, which again held. A breakout of the range should define the near-term trend direction.

Gold (H4 Candlestick Chart)

XAU/USD has blasted through 1850 resistance to form a new high above 1900 in a powerful new uptrend. 1880 would need to hold for the upside momentum to continue, otherwise the move higher could be seen as another false move up and the price could trade back down into its old rising channel pattern.

Brent Oil (H4 Candlestick Chart)

BRENT has struck the 95 level, leaving it short for now of 100. The price is consolidating above 90, which if it gives way could open up an overdue steeper correction. THe break of a rising trendline lends weight to the idea of a period of weaker price action.

US 500 (D1 Candlestick Chart)

US500 could not sustain a break above a downtrend line connecting the highs from above 4800 and failed again at 4600. The bounce off the latest decline failed at 4500 – demonstrating lower highs and a downtrend that could see fresh 2022 lows.

Thank you very much for reading - and have a great week trading!

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