GOLD, STOCKS, CRUDE OIL PRICES CRASH AS INFLATION WOES CONTINUE
Global equities crashed hard on Monday as worries about inflation and the pace of rate hikes continued. In Europe, the German DAX crashed by more than 1.35% while in France, the CAC 40 index dropped by over 2%. The Euro Stoxx 50 declined by 1.88% while in the UK, the FTSE 100 fell by 2%. The same trend happened in Asia, where the Nikkei 225, Hang Seng, and Shanghai fell by over 2%. American futures are also in the red. Investors are worried about the rising inflation and the margin pressure that is happening around the world. The Fed has hinted that it will continue hiking interest rates in the coming month.
The euro declined against the US dollar even after Emmanuel Macron won the election held on Sunday. He won decisively against Marine Le Pen, the far-right leader. In a statement, the incumbent vowed that he would work to unite a country that has been divided for a while. Therefore, analysts expect that the status quo, which favours the European Union will continue. Data from Germany showed that business sentiment was improving. The current assessment increased from 97.1 to 97.2 while the Ifo business climate index rose from 90.8 to 91.8.
The price of crude oil and other commodities declined sharply on Monday as China continued its lockdowns. The government announced that the lockdowns going on in Shanghai will continue in the coming days. Officials also insisted that testing will accelerate as they continued with their Covid-zero approach. According to the National Health Commission, there were 20,200 new cases on Sunday and 51 new deaths. There are also concerns about a new variation of Omicron known as BA.2.3, which is easily transmissible.
XBRUSD
The XBRUSD pair retreated to a low of 101.58, which was lower than this month’s high of 114.17. On the four-hour chart, it has dropped below the 25-day and 50-day moving averages. It is approaching the descending trendline shown in brown. The Stochastic oscillator and Commodity Channel Index have dropped below the oversold level. The pair will likely keep falling as bears target the support at 100.
EURUSD
The EURUSD pair dropped to a low of 1.0706, which was the lowest level since 2020. On the four-hour chart, the pair moved along the lower line of the Bollinger Bands. The bands have also widened, signaling that there is more volatility. The RSI has moved below the oversold level while the Stochastic oscillator has moved upwards. The pair will likely have a bullish comeback as investors buy the dip.
XAUUSD
The XAUUSD pair crashed to the lowest level since March 25. It fell to a low of 1,895, which was lower than the year-to-date high of 2,000. The pair has moved below 25-day and 50-day moving averages while the Commodity Channel Index has moved to the oversold level. The momentum oscillator has also dropped sharply. The pair will likely keep falling as bears target the support at 1,890.
