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In an interview on Dubai TV, Mohammed Hashad, Director of Research and Development Department at Noor Capital and member of the US Association of Technical Analysts, tackled the latest developments in financial markets.
Oil
US crude oil started trading this week with a decline of about 5 dollars, to see a barrel of oil around the level of $ 108.20 per barrel and the closing wave in China, which extends for 9 days. China is the largest energy consumer globally; shutdowns led to pressure on prices. We are witnessing more declines during today’s session and tomorrow’s session around the levels of 105 and 106 dollars. However, the general trend of oil is still bullish with the continuation of geopolitical tensions.
Geopolitical tensions
The uncertainty still surrounds the Russian-Ukrainian crisis with the end of the fourth round of negotiations. I do not think the Fed will change the tightening monetary policy that it started last month. The question about the rate hike is whether it will be 25 or 50 points basis. I expect that the interest rate will be raised by 25 basis points only and that the upcoming jobs data next Friday will paint a clear picture of the labor market.
US dollar index
The US dollar index, which measures the strength of the US currency against a basket of currencies, is still rising slowly and receiving support from the rise in speculation about rising interest rates from the Fed, with the 10-year Treasury bond yields rising at 2.5%, which gives a boost to the dollar.
Asian Stocks
The frustration that occurred as a result of the shutdown in Shanghai prompted investors to refrain from Asian stocks and resort to European stocks
Considering that the European Central Bank is still maintaining low-interest rates, as rising interest rates negatively affect stock prices, it increases the cost of lending, which leads to damage to profitability.
Gold
I think gold prices tend to rise in the medium term. Still, we may see corrections from time to time, as we saw during the current session trading. If this pivotal support, one of the most important keys to the trend, is broken, we may see gold around 1891 unless it is Reconsolidation over 1960.