📈💰 The USD Index soared last week fueled by hot CPI data, delaying rate cut expectations. All eyes on Fed Chair Powell's remarks this week. Will the hawkish tone send the USD to new heights? Meanwhile, UK inflation data awaits, hinting at potential impacts on GBPUSD. Stay tuned for market moves! 💼💵 #USD #Fed #Inflation #GBPUSD #MarketWatch
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FOREX Week Ahead Analysis
The USD Index rallied significantly last week after the US Consumer Price Index (CPI) came in hotter than expected. A rise in inflation pushed back market participants' expectations of a rate cut in June from the Fed. Many analysts still believe a cut would be necessary, however without a steady decline in inflation this looks unlikely.
Federal Reserve Chairman Jerome Powell is forecast to speak this week. Comments from the Fed chair will be watched closely. The market will want to understand where the Fed is positioned now and what it will take for the cuts to occur. Any hawkish tone could see the USD Index breach last year’s highs. We could also see pressure on US stock markets as interest rates being higher for longer will impact businesses ability to borrow money.
Attention will turn to GBPUSD this week as we see inflation data released in the UK. UK Consumer Price Index year on year is forecast to come in lower at 3.1% closer towards the 2-3% target range. The Bank of England Governor Bailey may point to this in his upcoming speech. UK Retail Sales for the month of March is anticipated to climb from 0.0% to 0.3%.
USD Index
The price on the chart has traded through multiple technical levels and some observations included:
- The USD Index rallied into the key resistance of 106.00.
- After a large move we can often see a week of consolidation or pullback. A zone of support rests at 105.50, which if tested could offer buyers another long opportunity.
EURUSD
The price on the chart has traded through multiple technical levels and some observations included:
- The EURUSD price on the weekly chart closed as a strong bearish candle, below key supporting lows of 1.0700.
- Consolidation lows can be seen around 1.0700 and could be an area of interest if price were to revisit.
GBPUSD
The price on the chart has traded through multiple technical levels and some observations included:
- The price of Cable broke down though support of 1.2525.
- If price continued lower we could see a move down towards 1.2100.
USDCAD
The price on the chart has traded through multiple technical levels and some observations included:
- USDCAD broke through the key resistance of 1.3600. Now the price has broken this level it could revisit the weekly range highs.
- Support can be seen around the key level of 1.3700.
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