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Inflationary pressures continue to increase, the market is betting on rising interest rate expectations

on 2021-11-24
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Fundamentals:

The US manufacturing and service industry data released yesterday showed that business activity has slowed down, but it is still higher than the average level before the epidemic, indicating that the US economy is still on a moderate recovery path. Several Fed officials said last week that the Fed needs to speed up the pace of tapering and raise interest rates as soon as possible.

After several Fed officials’ speeches, the market’s expectations for the timing of the Fed’s interest rate hike have increased. In addition, the re-election of Fed Chairman Powell is also conducive to the continuity of the Fed’s monetary policy. The current market is the main tone for the expected tightening of the Fed's future monetary policy and interest rate hikes.

Some officials believe that the Fed cannot raise interest rates too aggressively although facing the pressure of rising inflation. However, a considerable number of Fed officials still emphasize that the rise in inflation is temporary. Although it is acknowledged that the increase in inflation will last longer than expected, officials said that as supply chain problems are fixed, inflation will fall back in the mid-2022.

Some officials said that if they rush to raise interest rates, it will hurt US economic growth. The current market is facing two power games: interest rate hikes and inflationary pressures. Interest rate hikes may harm the US economy. Non-interest rate hikes and high inflation will also make people's lives more and more stressful. At the moment, the world is paying attention to the Fed's every move.

As most parts of the world enter the winter, the epidemic in Europe and the United States has once again counterattacked, and the surge in confirmed cases of infection has forced European and American countries to introduce relevant blockade restrictions again. This will bring a new round of challenges to the global economy, and may bring an even worse blow to the already tightening supply chain problems, and inflationary pressures will also face a situation of continuous rise.

Technical side:

Gold is on technical graphics, and the gold weekly chart is in a triangular convergent oscillating form. The convergence interval is 1760-1870. The daily upward trend was disrupted. The daily line presents a new downtrend. However, the downward momentum has slowed down significantly, and there is a rebound correction momentum in the short-term. On the four-hour graph, the gold trend is more volatile, and there is a short-term signal of bottoming around 1780.

One-hour graphical trend oscillating pattern, one-hour graphics focus on the 1788-1802 interval competition. Pay attention to the 1788 position within the day, and the price stabilizes above this position tends to be bullish. It is expected to test the target position of 1796-1802-1812, and the trend below this position will be the oscillating focus range of 1781-1802, with focus on support 1781.

Breaking below this position will turn into a weaker pattern in the day, and the price is expected to fall to 1775-1770 -1763 interval.

The first recommended strategy for the day trade is to be low: the reference point is in the 1788-1790 interval, the defense is 1779, and the target position is 1802-1812-1820.

Investment is risky, and you need to be cautious when entering the market. Personal advice is for communication and reference only, and no trading instructions are made.

 

 

Analyzed by: Duke Ruan
Independent Analyst

Disclaimer:
Golden FX Link Capital Co., Ltd. endeavors to ensure the accuracy and completeness of this research report. However, as the market is subject to change, the Company and our subsidiaries do not guarantee its completeness and accuracy, and the information is for reference only. Any person shall not regard such information as Golden FX Link Capital Co., Ltd. on leveraged foreign exchange, precious metals, stocks, and other financial products to provide real quotes, suggestions, solicitation, and inducement of investment. Guests should be aware of the risks involved in the investment, the volatility of the investment market, and the risk of loss can be very big, guests must carefully consider their own financial situation and investment purposes, to decide the direction of investment and the kind of investment products that are suitable for their owns.