XAU/USD Weekly Forecast (28th March 2022 – 1st April 2022)

Fundamental view:

The yellow metal traded high against the greenback during the trading course of the week. FOMC member’s hawkish stance favored the greenback during the first half of the week, and gold traded within a tight range uring first half of the week. FOMC Chairman Jerome Powell said that there is an obvious need to “move expeditiously” to a more neutral level or even restrictive levels to tame inflation. He also added “If we need to raise the Fed funds rate by more than 25 basis points (bps) at a meeting of meetings, we will do so.” On the same line, Cleveland Fed President Loretta Mester argued that a 50 basis points rate increase should not be off the table. Similarly, “the data will tell us if 50 bps is the right recipe” San Francisco Fed President Mary Daly noted. “I have everything on the table.”

On Thursday, The US and its allies announced that they will block the Russian central bank’s financial transactions that involve gold to make it difficult for the country to finance the war and bypass sanctions. Experts are with the opinion that Central Bank of Russia has more than $100 billion worth of gold in its holdings, which makes up roughly 20% of the bank’s reserves. This development favored the yellow metal.

The major economic events deciding the movement of the pair in the next week are Goods Trade Balance at Mar 28, CB Consumer Confidence Index at Mar 29, ADP Nonfarm Employment Change, GDP quarterly report, EIA Crude Oil Stocks Change at Mar 30, Initial Jobless Claims at Mar 31 and Nonfarm Payrolls at Apr 01 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 1.21% lower than the previous week. Maintaining high at 1966.2 and low at 1910.4 showed a movement of 558 pips.

In the upcoming week we expect XAU/USD to show a bullish trend.  The Instrument is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1979.1 may open a clean path towards 2000.5 and may take a way up to 2034.9. Should 1923.3 prove to be unreliable support, the XAUUSD may sink downwards 1888.9 and 1867.5 respectively. In H4 chart double bottom pattern breakout favors prospects of a bullish trend. Also to be noted Bullish harami formation exerts the expectation of uptrend for the pair.

Preference
Buy: 1957.6 target at 1999.5 and stop loss at 1920.3

 

Alternate Scenario
Sell: 1920.3 target at 1868.7 and stop loss at 1957.6

AUD/USD Weekly Forecast (28th March 2022 – 1st April 2022)

Fundamental view:

The Australian dollar climbed higher against the American dollar and reached a fresh 2022 high – 0.7536. Although market had a risk averse environment, AUD climbed up with the help of commodity prices. Talking about the central banks, A slew of influential FOMC members, including Fed Chair Jerome Powell, left the door open for a larger rise in borrowing costs to bring down unacceptably high inflation. The markets were quick to price in the possibility of a 50 bps Fed rate hike move at the May policy meeting. On the other hand, Reserve Bank of Australia Governor Philip Lowe, maintained the patient stance, barely indicating that a rate hike before year-end is possible.

The escalating tensions in the Ukraine-Russia saga boosted commodity prices which helped the commodity linked currency – AUD. US President Joe Biden had a meeting with European leaders, G-7 partners, and NATO allies before a White House press briefing. Besides other things, Biden said he would support the expulsion of Russia from the G-20, noting that sanctions could not deter Russia but might eventually force it to end the invasion. Additionally, he said that the US does not confirm that it will send troops to Ukraine if the Kremlin decides to use weapons of mass destruction.

In this week, Fed Chair Powell Speech on 21st March, Commonwealth Bank Manufacturing PMI on 24th March and US Pending Home Sales monthly report on 25th March boosted downtrend whereas US New Home Sales on 23rd March and US Core Durable Goods Orders monthly report on 24th March boosted uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Retail Sales monthly report, US Goods Trade Balance at Mar 28, US CB Consumer Confidence Index at Mar 29, US ADP Nonfarm Employment Change, US GDP quarterly report at Mar 30, RBA Private Sector Credit ,US Initial Jobless Claims at Mar 31 and US Nonfarm Payrolls at Apr 01.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.58% higher than the previous week. Maintaining high at 0.7536 and low at 0.7373 showed a movement of 163 pips.

In the upcoming week we expect AUD/USD to show a bearish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. Should 0.7412 proves to be unreliable support then the pair may fall further to 0.7311 and 0.7249 respectively whereas a solid breakout above 0.7575 will open a clear path upward to 0.7637 and then will further raise up to 0.7738. In H4 chart rising wedge pattern breakout favors prospects of a bearish trend. Also to be noted shooting star formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.7511 target at 0.7372 and stop loss at 0.7580

 

Alternate Scenario
Buy: 0.7580 target at 0.7737 and stop loss at 0.7511

USD/JPY Weekly Forecast (28th March 2022 – 1st April 2022)

Fundamental view:

The US dollar rallied against the Japanese yen during the trading course of the week. A slew of influential FOMC members, including Fed Chair Jerome Powell, left the door open for a larger rise in borrowing costs to bring down unacceptably high inflation. The markets were quick to price in the possibility of a 50 bps Fed rate hike move at the May policy meeting. The hawkish stance from Fed underpinned the USD bulls. On the other hand, Yen was undermined with BoJ’s 0.25% ceiling amid the ultra-loose policy stance adopted by the Japanese central bank. 

Meanwhile, Rising metal prices in the global markets due to the Ukraine war situation are impacting the Japanese economy to a major extent. Japan which is a major importers of oil and metals is facing some serious dents in its exchange flows. Every increasing cent in the prices of commodities is widening the fiscal deficit of Japan, which eventually is hurting Japanese economics.

In this week, Japan Markit Manufacturing PMI on 24th March and US Pending Home Sales monthly report on 25th March favored downtrend whereas Fed Chair Powell Speech on 21st March, EIA Crude Oil Stocks Change on 23rd march and Tokyo CPI yearly report on 25th March favored uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Unemployment Rate, US Goods Trade Balance at Mar 28, Japan Retail Sales  monthly report, US CB Consumer Confidence Index at Mar 29, US ADP Nonfarm Employment Change, US GDP quarterly report at Mar 30, BoJ Tankan Large Manufacturing Index, US Initial Jobless Claims at Mar 31 and US Nonfarm Payrolls at Apr 01.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 2.48% higher than the previous week. Maintaining high at 122.43 and low at 119.10 showed a movement of 333 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 123.34 may open a clean path towards 124.55 and may take a way up to 126.67. Should 120.01 prove to be unreliable support, the USDJPY may sink downwards 117.89 and 116.68 respectively. Chart formation of pennant pattern breakout upside in H4 chart favors prospects of a bullish trend Along with a hammer formation braces our expectation.

Preference
Buy: 122.12 target at 124.54 and stop loss at 119.96

 

Alternate Scenario
Sell: 119.96 target at 117.35 and stop loss at 122.12

GBP/USD Weekly Forecast (28th March 2022 – 1st April 2022)

Fundamental view:

The British pound gained for the second consecutive week against the greenback, However it is far less than 1.3300 (its 3 week high). The hawkish stance of Fed policymakers weighed on the pound. US Federal Reserve Chair Jerome Powell aggressive speech helped the dollar. Speaking about the economic outlook at the National Association for Business Economics Annual Economic Policy Conference, he said “inflation is much too high” and that the central bank will respond accordingly. A slew of Fed members along with Powell favored the 50bps hike and has noted they would support such a move as soon as May. He noted that their plans to reduce the balance sheet would likely be completed by the next meeting, although he did not clarify when they would start shrinking it. The BOE had already turned cautious at its March policy announcement due to the negative impact of higher inflation on economic activity. The monetary policy divergence between the Fed and the BOE came into play and weighed heavily on cable.

Meanwhile, the dollar was strengthened by the invitation of Ukrainian President Volodymyr Zelenskyy to address a NATO summit scheduled for Thursday but sterling remained resilient amid markets’ optimism over the Russia-Ukraine conflict. Further, Zelenskyy said they are prepared to discuss NATO membership and the post-ceasefire status of Crimea and Donbas.

In this week, US Initial Jobless Claims on 24th March and UK GfK Consumer Confidence on 25th March favored bearish trend whereas UK PPI Input monthly report on 23rd March and US Pending Home Sales monthly report on 25th March favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are BoE Governor Bailey Speech, US Goods Trade Balance at Mar 28, US CB Consumer Confidence Index at Mar 29, US ADP Nonfarm Employment Change, US GDP quarterly report at Mar 30, UK GDP quarterly report, US Initial Jobless Claims at Mar 31 and US Nonfarm Payrolls at Apr 01.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.67% higher than the previous week. Maintaining high at 1.3298 and low at 1.3120 showed a movement of 178 pips.

In the upcoming week we expect GBP/USD to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 1.3100 proves to be unreliable support then the pair may fall further to 1.3021 and 1.2922 respectively whereas a solid breakout above 1.3278 will open a clear path upward to 1.3377 and then will further raise up to 1.3456. In H4 chart ascending channel pattern breakout downside favors prospects of a bearish trend. Also to be noted Bearish engulfing formation exerts the expectation of downtrend for the pair.

Preference
Sell: 1.3175 target at 1.3022 and stop loss at 1.3282

 

Alternate Scenario
Buy: 1.3282 target at 1.3455 and stop loss at 1.3175