The weekly prediction in forex forecast; Banking crisis

The weekly prediction in forex forecast; Banking crisis

Due to the collapse of the Silicon Valley Bank and Signature Bank, the Fed increased its interest rate by 0.25%, leading to rising in Bitcoin, Gold, and the Japanese Yen.

The assets are chosen to trade each week. The director determines the difference between failures and success in Forex/CFD trading and not on the specific method you use to determine the trade exits and entries.

Important movements in the trading market

Last week some forex markets experienced an overall average loss of about -0.61%. This loss experienced was a result of the following issues:

  • Continuous Banking Crisis

The failure of the Signature Bank and Silicon Valley Bank in the USA these previous weeks has made banking shares weak and on rough paths. The week ended with major worry over Deutsche Bank, whose share price decreased by approximately 1/3 over the week.

  • Increase in Fed Rate

The expected increase in the Federal Reserve rate by 0.25%. The Fed insinuated that this would be the last increase in the present tightening cycle; this leaves the present 5% rate as its terminal rate. The Fed is still showing concerns about inflation. And according to Powell, the banking crisis will not promote the odds of a gentle landing on the US economy.

  • The rate increase by the SNB and BoE

As predicted, the Bank of England also increased its interest rate by 0.25%, and the Swiss National Bank increased theirs by 0.50%

Trading market technical analysis

For this week, we are going to be seeing some changes in the trading market.

According to the weekly chart, the US dollar index has decreased, continuing to exclude the key resistance level at 105.36. The US dollar is most likely to face unfavorable pressure this coming week because of the progressing fear of US bank contagion. It is advisable to focus on trading other assets.

NASDAQ was trading at a 7-month high; however, it was sold off quickly, and it closed less than the key resistance level shown within the price chart at 12820. Following the increase in the Fed rate, it is trading below 4%.

Bitcoin has declined these past weeks, and according to traders, it’s better to buy Gold that keeps trading with Bitcoin.