USD/CAD: energy stays strong driver for Canadian dollar

By the end of the week, the Canadian dollar was in high spirits, despite the serious geopolitical conflict around Ukraine. The Canadian dollar rallied on the back of the looming energy crisis, but was unable to consolidate its gains.

This week, the buyers of the Canadian dollar, who took advantage of the decline of the USD/CAD pair by over 150 pips, were in a winning position. As a result, the pair updated the lows recorded at the end of January 2022 and broke support at 1.2600.

USD/CAD is currently near the lowest levels of January. Analysts are expecting a further slide. On March 4, USD/CAD was trading at 1.2698, approaching a level of 1.2700.

The ubiquitous surge in energy prices poses a threat to the European economy. Against this backdrop, a number of key currencies, particularly the European currency, have weakened markedly. Meanwhile, commodity currencies such as the Canadian, Australian and New Zealand dollars have gained strength.

An energy boost helped the Canadian dollar to strengthen. USD/CAD fell from 1.2730 to 1.2595 amid an increase in oil exports. Notably, Canada is one of the largest oil exporters.

The price of oil on the global market is a major trigger for rising inflation. Earlier this week, the price of benchmark Brent added 5%, reaching $115 a barrel. This is the highest figure since 2011, experts emphasize. The bullish rally in the oil market was triggered by investor fears of a global supply shortage and inaction by OPEC+ countries, which have been curbing oil production growth as much as they can.

Traders are concerned about the potential impact of anti-Russian sanctions on the global energy sector. Many Western countries have refrained from imposing sanctions on the Russian energy sector, but some market participants have stopped buying Russian oil. Against the backdrop of disruptions to offshore supplies of Russian crude, global oil production could sag. On March 3, Brent was as high as $120 a barrel.

Another factor supporting the Canadian dollar was a 25 basis points interest rate hike by the Bank of Canada. The authority stressed that the regulator was ready for further rate hikes at upcoming meetings. It should be noted that the Bank of Canada has raised its key rate for the first time in 3.5 years and has set a course to further tighten monetary policy. The measure is required to limit inflationary pressures, which have intensified against the backdrop of rising fuel prices. The geopolitical conflict around Ukraine will not prevent further rate hikes, the bank believes.

The Canadian regulator is the second of the Group of Seven (G-7) central banks to increase its rate since the start of the COVID-19 pandemic. According to the Bank of Canada, a greater reduction in monetary stimulus will be required in the near future. This is necessary to further normalize monetary policy as the risk of stronger consumer price increases remains this year.

According to analysts, the main drivers behind the strength of the Canadian dollar and the decline in the USD/CAD pair to 1.2500 are oil and monetary ones. The Bank of Canada's hawkish rhetoric contributes to the CAD's strength. The national economy and currency are supported by rising oil prices, as raw materials are the country's key export resource.

US stocks closed lower, Dow Jones down 0.56%

At the close on the New York Stock Exchange, the Dow Jones fell 0.56% to a 6-month low, the S&P 500 index fell 0.73%, and the NASDAQ Composite index fell 0.28%.

Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 13.30 points or 6.76% to close at 210.00. Chevron Corp rose 8.49 points or 5.24% to close at 170.53. Boeing Co rose 4.63 points or 2.74% to close at 173.80.

Shares of Coca-Cola Co were the leaders of the fall, the price of which fell by 2.42 points (3.96%), ending the session at 58.66. Procter & Gamble Company rose 3.96% or 6.05 points to close at 146.79 while UnitedHealth Group Incorporated shed 2.75% or 13.41 points to close at 473.46.

Leading gainers among the S&P 500 index components in today's trading were Enphase Energy Inc, which rose 10.82% to 175.99, SolarEdge Technologies Inc, which gained 10.41% to close at 328.91, and also shares of Quanta Services Inc, which rose 8.17% to close the session at 116.83.

The biggest losers were Seagate Technology PLC, which shed 9.51% to close at 90.57. Shares of ConAgra Foods Inc shed 8.22% to end the session at 30.93. Quotes of Intuitive Surgical Inc decreased in price by 7.98% to 269.32.

Leading gainers among the components of the NASDAQ Composite in today's trading were Hycroft Mining Holding Corporation, which rose 203.31% to 1.00, Kala Pharmaceuticals Inc, which gained 88.49% to close at 1.15. as well as shares of Westport Fuel Systems Inc, which rose 52.63% to end the session at 2.03.

The drop leaders were shares of Imperial Petroleum Inc, which fell 43.33% to close at 4.25. Shares of Inspirato Inc lost 42.78% to end the session at 15.25. Quotes of Digital Brands Group Inc decreased in price by 30.61% to 1.36.

On the New York Stock Exchange, the number of securities that rose in price (1694) exceeded the number of those that closed in the red (1502), while quotes of 147 shares remained virtually unchanged. On the NASDAQ stock exchange, 2069 companies rose in price, 1727 fell, and 265 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.62% to 35.13.

Gold futures for April delivery added 3.12%, or 62.35, to $2.00 a troy ounce. In other commodities, WTI crude for April delivery rose 4.44%, or 5.30, to $124.70 a barrel. Futures for Brent crude for May delivery rose 0.06%, or 0.08, to $129.27 a barrel.

Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.00% to 1.09, while USD/JPY edged up 0.01% to hit 115.67.

Futures on the USD index fell 0.17% to 99.12.

US stocks closed lower, Dow Jones down 0.34%

At the close on the New York Stock Exchange, the Dow Jones fell 0.34%, the S&P 500 index fell 0.43%, the NASDAQ Composite index fell 0.95%.

Chevron Corp was the top gainer among the components of the Dow Jones index today, up 4.55 points or 2.74% to close at 170.82. Walmart Inc rose 3.17 points (2.27%) to close at 142.63. Dow Inc rose 0.83 points or 1.39% to close at 60.63.

Shares of Apple Inc became the leaders of the fall, the price of which fell by 4.43 points (2.72%), ending the session at 158.52. Procter & Gamble Company was up 2.57% or 3.83 points to close at 144.94, while Cisco Systems Inc was down 2.16% or 1.21 points to close at 54.71.

Leading gainers among the S&P 500 index components in today's trading were Halliburton Company, which rose 8.93% to hit 37.95, Baker Hughes Co, which gained 8.67% to close at 36.74, and Mosaic Co, which rose 7.74% to end the session at 62.19.

Etsy Inc was the biggest loser, shedding 5.35% to close at 136.98. Shares of EPAM Systems Inc lost 4.86% to end the session at 188.76. Quotes of MSCI Inc decreased in price by 4.69% to 465.26.

Leading gainers among the components of the NASDAQ Composite in today's trading were Hycroft Mining Holding Corporation, which rose 138.10% to hit 1.50, AgriFORCE Growing Systems Ltd, which gained 102.37% to close at 3.42 , as well as shares of Hoth Therapeutics Inc, which rose 38.79% to close the session at 0.80.

The biggest losers were Trean Insurance Group Inc, which shed 51.70% to close at 3.40. Shares of Fossil Group Inc lost 37.51% and ended the session at 9.08. Quotes TherapeuticsMD Inc fell in price by 27.50% to 0.29.

On the New York Stock Exchange, the number of securities that fell in price (1836) exceeded the number of those that closed in positive territory (1367), and quotes of 128 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,282 companies fell in price, 1,463 rose, and 253 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 6.84% to 30.23.

Gold futures for April delivery added 0.68% or 13.60 to hit $2.00 a troy ounce. In other commodities, WTI April futures fell 2.64%, or 2.87, to $105.83 a barrel. Futures for Brent oil for May delivery fell 0.04%, or 0.04, to $109.15 a barrel.

Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.05% to 1.10, while USD/JPY rallied 0.00% to hit 116.14.

Futures on the USD index rose by 0.58% to 98.53.

Hot forecast for GBP/USD on 15/03/2022

The European Union, as Josep Borrel said, seems to have really exhausted all possibilities for sanctions against Russia. The new sanctions package can be called purely symbolic, as it affects only a number of individuals and legal entities. In addition, Brussels intends to apply to the World Trade Organization for the suspension of the most favored nation regime in relation to Russia. But this point will have practically no effect, since Russia has not exported any goods to Europe anyway, except for raw materials, of course. So the introduction of protective duties, especially against the background of full-scale sanctions, will not affect the Russian economy in any way. It turns out that at least the European Union does not intend to further strengthen the sanctions confrontation, and it is quite possible that Russia will reciprocate. Which of course somewhat calms the market participants.

But another point is much more important. If you believe the statement of the official representatives of Ukraine, the negotiation process seems to have moved from a dead point, and some kind of peace agreement will be reached in the near future. At least, the adviser to the head of the office of the President of Ukraine, Oleksiy Arestovych, said that it could be achieved within a week. This means that the fighting may soon stop, and with it the flow of refugees to Western Europe will stop. And after all, it is the fighting that is the main reason for the rather large-scale weakening of the pound. The very prospect of their termination in the near future already contributes to its growth, which we have been observing since yesterday. If the situation does not change, and will move in this direction, then this growth will continue.

The GBPUSD currency pair approached the level of 1.3000 with surgical precision, where the downward movement slowed down. The psychological level puts pressure on bears, but in this situation it is considered by traders only as a variable foothold on the path of a downward trend.

The RSI technical instrument moves in the lower area of the 30/50 indicator in a four-hour period, which indicates a high interest of traders in short positions. RSI D1 is in the oversold zone, which is due to the intense downward movement and the important price level of 1.3000.

Alligator H4 and D1 indicate a downward trend. There are no intersections between MA moving lines.

Expectations and prospects:

Despite the high desire of traders to continue to form a downtrend, the level of 1.3000 has a negative impact on the volume of short positions. This may lead to a slowdown in the downward cycle and, as a result, a price pullback.

A complex indicator analysis gives a signal to buy in the short term due to a price rollback. Indicators in the intraday and medium-term periods signal a sale, due to a downward trend.

EU stocks maintain upward movement

At the close of trading on Wednesday, the main EU stock indices advanced amid rising risk appetite. In addition, market participants were awaiting the results of the FOMC meeting. They also continued to monitor news on the Russia- Ukraine conflict.

The STOXX Europe 600 Index grew by 3% to 448.45. The biggest gainers were Dutch conglomerate Prosus NV (+23.2%), Norwegian IT company Adevinta ASA (+15.8%), and Russian mining giant Polymetal International PLC (+14%).

The FTSE 100 Index jumped by 1.62% to 7291.68, while the CAC 40 index added 3.68%, hitting 6588.64. The DAX rose by 3.76%, approaching a 2-week high of 14440.74.

The shares of E.ON, the largest German energy supplier, climbed by 3.8%. The day before, the company reported an increase in adjusted net profit by 53% in annual terms following the results of last year. The earnings result significantly exceeded market expectations.

E.ON also points out that it expects a decrease in adjusted profit in 2022. The company is unable to assess the negative consequences of the Russia-Ukraine conflict for its operation yet.

The capitalization of EQT AB, the Swedish investment company, soared by 13% after it announced the acquisition of rival private-equity firm Baring Private Equity Asia for $ 7.5 billion.

On Wednesday, risk sentiment significantly increased in global markets. The stock indices of the Asia-Pacific region closed in the black. The Hang Seng index surged by 9% amid information that the Chinese authorities will adopt new rules for supervising the listing of companies on foreign exchanges. Meanwhile, the US stock markets also reported stable growth of 1-2%.

On Thursday, investors are anticipating the publication of the results of the FOMC meeting. According to preliminary estimates, the US regulator will raise the key rate to 0.25-0.5% per annum. Such an increase will be the first since the fall of 2018.

In addition, the Bank of England's meeting is scheduled for Thursday. Analysts assume that the central bank will announce a rate hike to 0.75% from 0.5% per annum.

As widely expected, the ECB kept the interest rate at zero and the deposit rate at minus 0.5% at the meeting last week.

At the same time, the regulator adjusted the volume of asset purchases. Monthly net purchases under the APP will amount to €40 billion in April, €30 billion in May and €20 billion in June.

Apart from that, the watchdog downgraded the forecast for Eurozone GDP growth from 4.2% to 3.2% in 2022.

Analysts reckon that traders were disappointed by the lack of reaction from the ECB to the war in eastern Europe. Following the conflict between Russia and Ukraine, Western states have permanently imposed sanctions against Russia. Last week, President Joe Biden banned the import of petroleum products from Russia. Large global corporations have partially or completely suspended their activities in Russia despite the prospects of s drop in their own profits.

Geopolitical tensions in eastern Europe remain in the limelight this week. The day before, Russian Foreign Minister Sergei Lavrov announced that there was hope for a compromise in negotiations with Ukraine. At the same time, Western media publish quotes from speeches of Ukrainian President Vladimir Zelensky, e.g. that talks with Russia were sounding 'more realistic'.

Trading plan for starters of EUR/USD and GBP/USD on March 22, 2022

March 22 economic calendar:
Tuesday is not much different from Monday, the macroeconomic calendar is still empty. Traders will continue to analyze the information flow for hot topics.

Trading plan for EUR/USD on March 22:
Stable retention of the price below the level of 1.1000 may well lead to a subsequent recovery of dollar positions relative to the recent correction. In case of a coincidence of expectations, the euro rate may fall to the values of 1.0900-1.0800.

An alternative scenario for the development of the market will be considered by traders if the quote returns above 1.1050. This step may well disrupt the recovery process.

Trading plan for GBP/USD on March 22:
In this situation, traders are still considering the trading tactics of breaking one or another control value relative to the price stagnation. In this regard, buy positions will be valid after holding the price above 1.3210 in a four-hour period, and sell positions would be active after holding the price below 1.3080 in a four-hour period.

ETH surpasses BTC in terms of growth rate

Ethereum soared above $3,000 on Tuesday. The coin has advanced by 3% over the last 24 hours and has added 16% over the past week. At the moment of writing, the altcoin traded at $3,009.76.

On Tuesday, the cryptocurrency updated the February high, and its market capitalization hit $361 billion.

The surge came after BTC, the world's largest digital asset, reached $43,300 and broke through the high as of March 3. As a reminder, bitcoin has traded sideways in the range between $37,000 and $42,000 for about a month.

However, after approaching the high on Tuesday, BTC started to gradually decrease. At the moment of writing, digital gold traded at $42,500. The asset has increased by 3% over the past 24 hours and has grown by 7.1% over the past seven days.

The spike in the value of ETH came amid expectations of the updates that could change the mining process of the altcoin.

Today, pressure mainly came from buyers in Europe and the United States, analysts at Glassnode said. Meanwhile, market players in the Asian region were more willing to sell the asset.

Other popular tokens showed steady growth, following a rise in BTC and ETH. Thus, Dogecoin grew 4.1% to $0.124. Uniswap and Cardano appreciated by about 5%.

The total capitalization of the crypto market came in at $2,02 trillion, according to CoinGecko, the world's largest cryptocurrency data aggregator.

Pound sterling fluctuates as BoE revises plans due to inflation

The pound sterling has made slight gains over the week. However, GBP remains in a downtrend. Growing inflationary and geopolitical risks are putting pressure on the British currency, forcing the Bank of England to change its earlier plans.

Inflation in the UK has reached the highest point in 30 years, cancelling the plans of the British government. In February, consumer prices added 6.2%, and producer price inflation reached 10.1%. The government planned to impose the highest taxes in years next month to help economic recovery and prevent inflation from spiraling out of control.

Originally, the national insurance rate was to be increased by 1.25%, which would contribute £12 billion to state coffers. However, this plan was suspended due to difficult economic situation, UK finance minister Rishi Sunak announced on Wednesday, March 23.

Furthermore, the government reduced payroll taxes, cut the basic rate of income tax, and decreased the fuel duty. These measures are aimed at helping poorer families cope with rising prices. However, these plans are unlikely to affect the actual economic situation. According to projections by the Institute of Fiscal Studies (IFS), the cost of living for the poorest could rise by 10%, while their benefits will increase by just 3.1%. The Bank of England estimates that inflation could rise to 8% in April. However, its actual level exceeds these projections.

This situation is detrimental to the pound sterling in the long term. GBP is currently struggling to hold its current fragile position. Amid a protracted price increase, the British pound decreased on Thursday, March 24. GBP is fluctuating up and down, which are unbalancing the pound sterling's price dynamics. GBP/USD was moving within the 1.3214-1.3215 range early on Friday, trying to escape the downward spiral.

Analysts at Morgan Stanley recommend staying short on GBP, as markets price in too much tightening from the Bank of England this year - up to 5 interest rate increases in 2022.

Many economists are cautious with their outlooks, because the UK economy is in a difficult situation, and its currency is far from stable.

The Bank of England is conducting its current monetary policy in accordance with the challenges at hand, adjusting it depending on the current situation. The UK central bank has increased the key rate 3 times over the past 4 months. The hikes helped GBP advance against EUR, but weakened GBP/USD. Experts do not rule out another increase at the next BoE meeting on April 14.

The economic slowdown in the UK and geopolitical uncertainty demands caution in making key decisions from the Bank of England. As real disposable income falls and energy prices soar, the UK economy is expected to weaken.

Earlier outlooks suggested inflationary pressure would peak in April, with prices reaching 8%. However, stronger negative tendencies in the economy could send prices skyward throughout the year, experts predict. The Bank of England suggests further monetary tightening is appropriate amid skyrocketing real inflation in the UK.

US stocks closed higher, Dow Jones up 0.27%

At the close in the New York Stock Exchange, the Dow Jones rose 0.27% to hit a monthly high, the S&P 500 index rose 0.71%, the NASDAQ Composite index rose 1.31%.

Shares of Microsoft Corporation were the leaders of the gains among the components of the Dow Jones index in today's trading, which gained 7.02 points (2.31%) to close at 310.70. Salesforce.com Inc rose 4.25 points or 2.01% to close at 215.28. Walmart Inc rose 2.55 points or 1.78% to close at 146.00.

The losers were shares of Chevron Corp, which lost 2.96 points or 1.75% to end the session at 166.35. Dow Inc was up 0.59 points (0.91%) to close at 64.11, while JPMorgan Chase & Co was down 1.05 points (0.74%) to close at 140. .87.

Leading gainers among the S&P 500 index components in today's trading were Tesla Inc, which rose 8.03% to hit 1.00, Carnival Corporation, which gained 5.49% to close at 19.40, and Etsy Inc, which rose 4.70% to end the session at 138.54.

The biggest losers were Discovery Inc Class A, which shed 6.47% to close at 25.58. Shares of Discovery Communications C Inc shed 6.15% to end the session at 25.63. Quotes of Mosaic Co decreased in price by 4.72% to 67.97.

Leading gainers among the components of the NASDAQ Composite in today's trading were Hycroft Mining Holding Corporation, which rose 81.25% to hit 2.32, DatChat Inc, which gained 61.45% to close at 2.68, and also shares of Newegg Commerce Inc, which rose 43.41% to end the session at 7.40.

The biggest losers were Clever Leaves Holdings Inc, which shed 50.26% to close at 1.91. Neuroone Medical Technologies Corp lost 46.85% to end the session at 1.18. Quotes of Amylyx Pharmaceuticals Inc decreased in price by 35.96% to 16.01.

On the New York Stock Exchange, the number of securities that fell in price (1,715) exceeded the number of those that closed in positive territory (1,490), and quotes of 134 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,051 stocks fell, 1,843 rose, and 199 remained at the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 5.67% to 19.63, hitting a new monthly low.

Gold futures for April delivery lost 1.64%, or 32.10, to hit $1.00 a troy ounce. In other commodities, WTI crude for May delivery fell 9.18%, or 10.46, to $103.44 a barrel. Brent futures for June delivery fell 9.01%, or 10.58, to $106.79 a barrel.

Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.07% to 1.10, while USD/JPY rose 1.45% to hit 123.83.

Futures on the USD index rose by 0.27% to 99.08.

US stocks extend losses after confident rise early this week

On Thursday, the main European stock indices continue to drop. However, at the beginning of the trading session, they climbed higher but later resumed the downward movement. Market participants are deeply concerned about the prospects of a slowdown in the global economy. The weakening of inflation fears amid a drawdown in oil prices limits the upward movement in European stock exchanges.

At the time of writing this article, the STOXX Europe 600 lost 0.12%, dropping to 459.63.

The shares of Swedish IT company Sinch AB (-10.7%), Polish logistics company InPost SA (-4%), as well as Telecom Italia SpA (-3.2%) incurred the biggest losses.

The largest gainers were the stocks of Russian gold mining company - Polymetal International (+8.1%) and Orpea SA (+4.8%).

On Thursday, the DAX index is down by 0.04%. The FTSE MIB shed 0.2%, the IBEX 35 decreased by 0.15%, the FTSE 100 slid down by 0.04%, and the CAC 40 dropped by 0.16%.

Despite a constant decrease in recent days, the leading European indices will end March on a positive note. The Stoxx 600 grew by 4%, while the DAX rose by 5%.

H&M shares nosedived by 8.5%. Despite the company's upbeat earnings report in the first quarter of the current financial year, the net profit was lower than analysts' forecasts.

The capitalization of UK investment company Brewin Dolphin Holdings instantly soared by more than 60% on the news that the Royal Bank of Canada agreed to buy it for $ 2.1 billion.

During Wednesday's trading session, the major EU indices closed in the red after a spectacular rise a day earlier. The day before, market participants assessed the prospects of a recovery in the global economy amid the geopolitical woes in Eastern Europe.

As a result, the STOXX Europe 600 index sank by 0.41% to 460.19.

The shares of UK advertising company S4 Capital Plc logged the steepest drop among the companies included in the index. Its stock collapsed by 36%. S4 Capital Plc announced another delay in the publication of the earnings report due to problems with the PricewaterhouseCoopers audit.

The CAC 40 index lost 0.74% on Wednesday, the DAX shed 1.45%, the FTSE MIB decreased by 0.03%, and the IBEX 35 slid down by 0.74%. Only the FTSE 100 index grew by 0.55%.

Yesterday, the stocks of companies doing business in Russia also incurred losses. French conglomerates Societe Generale and BNP Paribas sank by 2.5% and 2.3%, respectively. Renault shares fell by 4%.

The shares of Swiss financial holding UBS Group AG dropped by 1.5%. Even the announcement of the launch of a new share-buyback program of up to $6 billion the day before did not boost the company's shares. The program is scheduled to begin today. It will stay in effect for two years,

The main reason for a sharp decline in the DAX index was the outlook for Germany's economy. Earlier, analysts lowered its GDP outlook for the current year amid the escalation of the conflict between Ukraine and Russia. Thus, the growth of gross domestic product may total only 1.8%. In November 2021, economists predicted an increase in GDP by 4.6% in 2022.

As for macroeconomic figures for Germany, in March, the inflation rate soared to 7.3% in annual terms from 5.1% in February. According to the Federal Statistical Office, the indicator hit an all-time high.

Inflation in Spain surged to 9.8% in March from 7.6% in February, notching the highest level since 1985. At the same time, experts predicted an increase of only 8%.

According to preliminary data, in March, the consumer confidence index in Sweden plunged to 73.5 from February 89, reaching a 30-year low.

Another bearish factor for the DAX index was a dazzling rise in oil prices on Wednesday. Crude oil increased by 3%, while gas prices in Europe jumped by 9%.

The FTSE 100 was up amid a rally in the commodity market. As a result, the oil and gas industries in the eurozone expanded by 3.3% and 2.4%, respectively. The capitalization of French energy giant TotalEnergies, UK Petroleum, and Glencore rose by 2.5%, 3.1%, and 4.2%, respectively.

Geopolitical tensions, which began more than a month ago, have adversely affected stock markets worldwide. In addition, analysts are confident that the Russia-Ukraine conflict will slow down the expansion of the global economy as well as trigger a surge in inflation and shortages of raw materials in some countries.

Trading plan for EUR/USD and GBP/USD on April 5, 2022

The pound has been marking time for a whole week, although there is no talk of any lull in the foreign exchange market. The single European currency, for example, has been steadily going down for several days now. At the same time, the UK cannot boast of any remarkable macroeconomic data, so the behavior of the British currency is no longer surprising, but fearful.

The market cannot stand still for so long, and even for no apparent reason. This only speaks of an excessive speculative component, which will inevitably make itself felt. It is most logical to assume that the British pound will move downwards, following the euro. But due to the excessive speculative component, upward movement is also possible. And this scenario seems to be the most realistic. That is, first a sharp jump up, and then a rapid reversal and a rapid upward movement.

But all this needs a reason. Given that the macroeconomic calendar is empty, and in general the pound ignores statistics, everything will depend on the general information background. Therefore, it is worth keeping a close eye on the news feed of the largest media outlets. Any news that in one way or another will affect the UK and its economy can become the very trigger that starts this whole process.

But the euro seems to have finally realized that there is a serious gap between the United States and the European Union in terms of macroeconomic statistics. And not much in favor of the euro area. In general, the single European currency steadily went down during the American session. This shows that European traders still deny the reality, while American traders look at things a little more rationally.

The euro continues to be under serious pressure, and it is not yet clear when it will be able to break out of this state. More specifically, what can help it. Macroeconomic indicators are increasingly suggesting that Europe is bearing the greatest losses due to the sanctions confrontation between the West and Russia.

The EURUSD currency pair has reached a variable pivot in the form of the 1.0940/1.0965 area during an intensive downward movement. This led to a slight slowdown with signs of a possible pullback. The subsequent increase in the volume of short positions is expected after holding the price below the value of 1.0940 in a four-hour period. Until then, the risk of a rebound remains.

The GBPUSD currency pair has been moving in the 1.3100/1.3180 side channel for almost a week now. This indicates uncertainty and possible speculative activity in the future. Trading tactics consider the method of breaking through one or another border with confirmation in a four-hour period.

Tips for beginner traders in EUR/USD and GBP/USD on April 13, 2022

Economic calendar for April 13
Data on the UK inflation were published today, which saw an acceleration in consumer price growth from 6.2% to 7.0% with a forecast of 6.7%. Such high inflation is damaging the economy, which is a negative factor for the pound sterling.

During the American trading session, the producer price index in the United States will be published, which is expected to grow from 10.0% to 10.6%. Rising prices will lead to further inflation, which is already at historical levels.

All this is a negative factor for the US economy.

Time targeting

US producer price index - 12:30 UTC

Trading plan for EUR/USD on April 13
In this situation, holding the price below the level of 1.0800 in a four-hour period will indicate a continuation of the trend. This may lead to a subsequent movement towards the local minimum of 2020.

An alternative scenario for the development of the market considers another slowdown in the downward move within 1.0800. This may lead to a temporary pullback, but not to a change in trading interests.

Trading plan for GBP/USD on April 13
The price stagnation within the deviation of the 1.3000 level will soon end. With a high degree of probability, it will become a lever for speculators in the upcoming acceleration in the market. It is worth considering that the signal of prolongation of the downward trend will be confirmed only after the price is kept below the value of 1.2950 in a four-hour period.

As for the upward development of the price, traders consider this scenario as a local rebound of the price from the support level of 1.3000. The signal for action will come from the market at the moment the price is held above the value of 1.3055. In the future, this move may lead to the 1.3105 mark, after which a price reversal is not excluded.

Gold went into the shadow of a strong dollar

This week, the demand for safe-haven assets has increased significantly. Gold has benefited from another spike in US inflation. But it seems that bullion is starting to seriously lose to the more reliable dollar.

Yesterday's trading on the New York COMEX was the last one this week. Today, many US markets are closed due to the Good Friday holiday.

Gold finished the shortened working week with an increase. Since Monday, its quotes have increased by 1.5%. The main growth driver for the yellow asset was the statistics on consumer prices in the US for March.

Last month, inflation in America accelerated to 8.5% year on year. This is a new 40-year high. The last time the rate was at such a high level was in January 1982.

The record price increase not only increased the value of the precious metal, but also reinforced the Fed's intention to raise interest rates more sharply at its next meeting.

In March, the US central bank raised rates by 25 bp for the first time in four years. Now that inflationary pressures have increased, it is highly likely that the Fed's next move will be to raise the rate by 50 bps.

This version was confirmed on Thursday by New York Fed President John Williams. He said raising interest rates by half a percentage point in May would be a "smart option" for the US central bank.

The hawkish rhetoric of Fed officials has fueled US Treasury yields across the curve. This acted as fuel for the dollar.

Yesterday the greenback index jumped 0.5% against its main competitors. The currency broke through the psychologically important level of 100 points.

The steep dive of the euro also helped the greenback to strengthen. The EU currency fell sharply on the European Central Bank's dovish position. Yesterday, the ECB's meeting for monetary policy took place. The central bank decided to leave its course unchanged for the time being.

Another driver for the dollar was the release of the consumer sentiment index of the University of Michigan. In April, the indicator rose sharply to 65.7 from the March value of 59.4 points.

The powerful momentum that the greenback received had a negative impact on gold quotes. On Thursday, the asset fell 0.5%, or $9.80. The price dropped to $1,974.90. This is the first drop in the value of the precious metal in six trading sessions.

Recall that in the outgoing week, bullion tested a critical level on the way to $2,000. But, according to analysts, gold will not be able to break out of the current price range in the near future. The main obstacle is the dollar.

Now we are seeing strong bullish dynamics of the US currency. According to forecasts, it will continue in the short term. As long as the greenback index remains above 100, the yellow asset has almost no chance of approaching $2,000.

What can help gold?
In the foreseeable future, the gold market will continue to follow the rhetoric of the world's central banks, many of which are hawkish. The Bank of England's interest rate decision is particularly important now.

Tightening the policy of major central banks may lead to a weakening of the US currency. This is a favorable factor for the precious metal.

In addition to the fall of the dollar, bullion may receive support from geopolitics. Currently, most experts predict a further escalation of the military conflict in Eastern Europe.

This week, Russia threatened to deploy nuclear weapons and hypersonic missiles if Sweden and Finland join NATO. The comment came from the Deputy Chairman of the Security Council of the Russian Federation Dmitry Medvedev.

This happened just a day after US President Joe Biden announced that America would provide Kiev with additional firepower, including heavy artillery, worth $800 million.

If the situation in Ukraine continues to heat up, gold may come close to $2,000. However, traders should be prepared for the opposite situation.

The settlement of the conflict in Eastern Europe or the reduction of inflationary risks may lead to a significant drop in the value of the precious metal – up to $1,900.