Shares show high volatility, which indicates increasing risks. The market could be wrong about the Fed's interest rate. Recent projections show that Fed officials expect the federal funds rate to rise to at least 5.1% from the current range of 4.75% to 5%. That suggests the Fed could make another quarter-point interest rate hike, then keep rates at that level until the end of the year
However, Wall Street has again become more confident that the Fed will start lowering rates already in the second half of the year. Derivatives markets show traders expect US rates to fall to around 4.4% by the end of the year. For some, the biggest question remains how well the economy will withstand the pressure of higher interest rates and tightening financial conditions.
From a technical point of view, on the example of the S&P500 index, a breakthrough to the area of 4500 and above is possible, provided that the price can be fixed above 4150.
Most market participants nevertheless assume that the Fed, after a series of bank failures, will not continue to raise rates at the same pace and will take a break. If we assume this scenario, the dollar will continue to decline, investors will continue to buy risks and gold will not be able to overcome the level of 2000 per ounce.
On the weekly chart, gold is trying to maintain its current position with the goal of overcoming 2000. On the daily chart, a pronounced graphic figure "Flag" is forming. If the figure is implemented, the price will again try to break the 2060+ level
Inflation in the EU is decreasing, although it is still far from 2%. Statistics on Friday show 6.9% in annual terms. A short period of low prices for oil and gas, the end of the winter period gave hope for a further decrease in inflation. But the unexpected decision of the OPEC+ countries to reduce production may give a new impetus to inflation.
The expected increase in oil prices and inflation will force the EU to continue the fight against inflation. The growth of the euro against the dollar is likely to continue. The dollar is most likely the same, will continue its decline to the franc in the region of 0.9-0.88.
The decision by the Organization of the Petroleum Exporting Countries and its allies to cut oil production came as a huge surprise to the market, given earlier rhetoric from the group's leader, Saudi Arabia, that the country had no plans to cut output. The move brought concerns about inflationary pressures back to the fore. Higher prices and aggressive tightening of monetary policy by central banks could lead to a recession in the global economy. In the US, the decision of OPEC+ was called imprudent in the current market conditions. The White House added that the United States will work with manufacturers and consumers to manage gasoline prices for Americans.
From a technical point of view, the price can repeat the maximum in the resistance line of the descending channel in the area of 95. The internal resistance line is approximately in the area of 87. Thus, in the coming days, we expect a continuation of the growth attempt.
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