What will move the market this week(May 16–20)?
Will the market rebound or keep falling? Will there be more surprises? Which assets should you be looking at now?
Last week led to one of the biggest selloffs we have witnessed in markets. Stocks, crypto, gold, and the euro were under huge pressure amid the advent of recession in the US. Stay ahead of the trends, and make the most out of this week! See the definitive list of what’s moving the Major asset classes.
Forex
On May 5, the Bank of England raised the interest rate to 1% for the fourth consecutive time, and this monetary tightening policy. The Bank of England will also announce its annual CPI reading on May 18 as well as the Retail Sales data on May 20.
As the releases come out, the GBPUSD pair may get closer to the two-year low of 1.2000. The chance for a reversal from the 1.2000–1.2100 support area is high, so look closely for the reversal patterns on daily and H4 charts.
Despite the British pound being in a weak and tricky situation with Russian oil and gas supplies, the currency may yet get better. However, if the CPI is higher than expected, the GBP will fall, meaning the rate hikes won’t help.
Oil & Gold
Oil has been moving sideways for more than two months, but a breakout is nigh. Factors like OPEC’s inability to increase oil output at a faster rate, a possible Russian oil embargo, and other bullish factors are currently the main drivers of the market price. We however expect oil to get bullish at the end of consolidation and reach $150 per Barrel.
Gold meanwhile managed to break through the support trendline at $1840, approaching $1800. This will act as the main barrier between the bullish and bearish outlook for the next weeks or even months and if the strengthening of the USD continues, XAUUSD may fall significantly.
Stocks
S&P500 (US500) index closed last week below the 100-weekly moving average for the first time since 2020. This generally indicates the start of a bearish market for the stocks. The index may yet reach 3500, the 200-weekly average, before trying to revive the uptrend. However, the index will have to surpass the 3800 support line which is a bearish channel’s lower border.
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