This week, global market sentiment continued to improve. The Nasdaq 100, S&P 500, and Dow Jones gained 4.32%, 2.47%, and 1.81%, respectively, on Wall Street. The German DAX 40 gained 0.77% across the Atlantic. Meanwhile, the Nikkei 225 and Hang Seng Index surged 3.12% and 5.15%, respectively, in Asia-Pacific.
Even as the Federal Reserve continues to raise interest rates and shrink its balance sheet, global financial conditions continue to ease, assisting in the restoration of market liquidity. As a result, the US Dollar is feeling the pinch and suffered another disappointing week, as seen in the figure below. Gold prices have also been rising, but momentum has slowed in recent weeks.
The Australian Dollar was a striking standout last week. Higher-than-expected fourth-quarter inflation raised hawkish RBA policy expectations, causing the AUD/USD to rise. The sentiment-driven currency is also benefitting from increased risk appetite. The New Zealand Dollar, which has been acting similarly, has also risen this week.
All eyes will be on the FOMC rate decision on Wednesday. The rate of tightening will likely drop to 25 basis points. What traders will be interested in is how the central bank's perspective changes in relation to market pricing. The market looks to be more dovish than the Fed, laying the groundwork for disappointment.
Other noteworthy event risks in the next week include the January non-farm payrolls data in the United States, as markets continue to assess the economy's health. Rate decisions of the Bank of England and the European Central Bank are also due for the British Pound and the Euro, respectively. China issues manufacturing PMI for the AUD/USD. What else is in store for markets this week？
Fundamental Forecasts for the S&P 500 and Nasdaq 100: Prepare for an Event Packed Week Ahead US equities market traders will be looking forward to next week's jam-packed data and earnings schedule, as well as the resulting volatility.
GBP Weekly Outlook: The BoE and the Fed Will Decide Pound Sentiment
GBP/USD is trading at a critical inflection point, with the BoE and Fed rate decisions next week serving as triggers for short/medium-term directional bias.
The dollar's volatility is linked to the FOMC, NFPs, and earnings…
But Is There a Pattern？
Out of necessity, the US Dollar is likely to see volatility and a breakthrough from an exceedingly tight range. However, this does not ensure that what we learn will result in a clear pattern. The Fed rate decision, top US profits, and nonfarm payrolls are all on the agenda for the dollar.
WTI Oil Fundamental Forecast: Promising Short-Term Outlook with Key Risk Events in the Week Ahead WTI technicals and fundamentals are anticipating more gains.
Will next week's large risk events dampen the mood and halt the bullish momentum？
Weekly Euro Forecast: Is an ECB rate hike on the way, and Has Core Inflation Peaked？
The ECB has come together, predicting further 50-basis-point rises as core inflation remains sticky, and Europe's economic outlook is strengthening as a gas emergency has been averted.
Gold Price Prediction: Easing Financial Conditions Put the Fed in a Catch-22
Gold prices might decline if the Federal Reserve fails to meet dovish market expectations, which have resulted in easing financial conditions before inflation returns to its goal.
Technical Predictions: US Dollar Technical Prediction: USD Support Test Into a Data-Heavy Week
The US Dollar took four months to reverse half of a two-year trend, but prices have been stuck at that halfway point for two weeks now. That will most likely alter next week.
Technical Outlook for the S&P 500 and the NASDAQ 100 INDEX: Turning Positive
Chart developments imply that US market indexes are set for a break higher, boosting the chance that the worst is over for the time being.
What is the prognosis for the S&P 500 and the Nasdaq 100, and what are the key levels to watch？
Forecast for the Dollar Yen: USD/JPY Is Still Conflicted The USD/JPY is now trading in a limited zone of support and resistance at the psychological threshold of 130.000. Is this the tranquillity before the storm？
Keep an eye out for additional market updates.
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