THE US Federal Reserve increased the Fed fund rates by 25 basis points, raising the rates to 4.75 to give per cent. Chairman Jerome Powell commented that the effort to fight against inflation is not over yet, signaling more hikes in the following months.

On Thursday, European Central Bank hiked its rates by 50 basis points and pledged more rate hike in March. The base rate stands at three per cent now, the highest since November 2008.

The Bank of England also increased its rates by 50 basis points to four per cent. Policymakers said the inflation is seen as shallow now and would likely take a break in raising rates.

US non-farm payroll increased by 517,000 in January. Unemployment rate fell to 3.4 per cent, the lowest record in 53 years. The dollar is regaining its strength as inflation pressure returns to the market.

Eurozone inflation dipped to 8.5 per cent in January on an annual basis, down from 9.2 per cent annualised rate in December. Inflation softened as oil prices have been waning.

Technical forecast

US dollar/Japanese yen reversed up on Friday. In our opinion, the market might have bottomed out at 128.50 and it will likely begin to recover in the coming weeks. We foresee the trend will likely escalate to 134 while sitting at 130 support. Beware of breaking beneath the aforementioned support.

Euro/US dollar sunk below 1.09 and moved into a correction. The bears will likely drift lower and we expect the trend to trade from 1.07 to 1.09. The dollar will likely begin to recover and push against the euro’s strength.

British pound/US dollar topped off 1.24 recently and begun to wane. We forecast the trend will likely trade lower but stay contained within 1.1850 to 1.21. Some whipsaws are expected towards the weekend and traders are cautioned to be alert in their risk management.

WTI Crude prices went downwards after failing to pierce above US$80 per barrel. We reckoned the support will likely rise at US$70 per barrel to counter the downward move.

The overall range is expected to trade from US$70 to US$78 per barrel this week. The market might be prone more to weakness due to the Ukraine war and rising dollar.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives traded sideways. The market has been weak due to lower regional demand and falling soybean oil prices. April 2023 Futures contract closed at RM3,848 per metric tonne on Friday. We predict the market will likely range from RM3,740 to RM4,000 per metric tonne. Uncertainty still looms in the market.

Gold prices plunged from fearful profit-taking on Friday. We target the market sentiment will remain weak and trade from US$1,850 to US$1,900 per ounce. In case of the violation beneath US$1,850 per ounce support, we project the bears will likely drive lower and test US$1,820 per ounce as our next target support.

Silver prices closed above US$24 per ounce last week. The market sank on Friday following the dollar’s rise. We foresee the trend will likely trade in a tight range from US$23 to US$24 per ounce while most interest will still pursue the gold market. Traders are advised to be patient.