Entering the trading week, traders remain on edge about the lingering impact of continued stubbornly high inflation particularly out of the United States. The inflation reading last week shows that inflation has yet to temper, although to be fair the recent Federal Reserve Bank rate hike of 50 basis points will take some time to be absorbed by the financial markets. EUR/USD remained just above 1.0400 (1.0420) and GBP/USD remains in the 1.2230 region for the time being. A further retracement higher in both pairs is likely necessary for the necessary momentum to be generated for a further plunge downward.
Traders continue to dump Gold in the near term as it touched below $1,800 per ounce in early trading before recovering slightly (currently: $1,801.00). If rallies in Gold continue to be contained a further drop is possible with a test of $1,750 upcoming in the medium term.
WTI Crude Oil reminded us it is still experiencing shortages in these markets as it is now trading $108.15 per barrel. A break back above $110.00 would be signficant and indicate a further run higher is on the cards.
Bitcoin bulls were hopeful coming out of the weekend BTC could generate some momentum, however just the opposite has happened. A test of $30,000 to the upside has been rejected and BTC/USD is now trading at $29,600. If the $30,000 establishes itself as key resistance moving forward, it spells further trouble for Bitcoin.
