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Trading ideas for GBP/USD, USD/JPY and Gold

April 07, 2022

GBP/USD: The Great Britain pound fell against the US dollar on Wednesday after the latest hawkish comments by US Federal Reserve officials. The minutes showed that the Fed’s members expressed worry about inflation. The officials have finalized plans to reduce bond holdings in an aggressive effort to restrain rising prices. The Fed is preparing to reduce the $9 trillion balance sheet at a pace of about $95 billion a month. Also, many officials assume one or more rate hikes of 50 basis points could be appropriate at future meetings. Meanwhile, the Bank of England followed a dovish interest hike of 25 basis points in March against 50 in the US, which is likely to set a bearish tone for GBP in the near future. The local support level can be seen at 1.3045. A breakout below could take the pair to an immediate target of 1.2980.

SELL 1.3040/TP 1.2980/SL 1.3060


USD/JPY: The US dollar rose against the Japanese yen on Wednesday due to a general strengthening of the greenback. The Bank of Japan remains stuck with its ultra-loose monetary policy stance while defending its yield curve target at 0.25%. This action by the Bank of Japan has widened the monetary policy divergence between the Fed and the Japanese central bank, leaving the yen in the hands of the bears. As for the macroeconomic calendar, today we expect US Initial Jobless Claims figures. The local resistance level is located at 123.95. A breakout to the upside can trigger growth to 124.65.

BUY 124.00/TP 124.65/SL 123.78


XAU/USD: Gold prices held steady after Wednesday’s release of the Federal Reserve meeting minutes in March, as the metals appeal as a safe haven. Rising US interest rates and higher yields increase the opportunity cost of holding bullion, which is also used as a hedge against rising inflation. However, Gold prices could continue rising in the near future due to the risk that the Fed would be unable to raise rates quickly enough to fight the high inflation or escalation of the geopolitical situation in Eastern Europe. Gold is likely to correct to $1915, and after that, the price will probably continue its movement to the upper end of the range towards $1945.

BUY LIMIT $1915/TP $1945/SL $1905