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In this week’s Week Ahead Analysis we take a look at the key charts of the week with #USDJPY, #AUDUSD, #GOLD and more!
Watch the video to learn more…
Forex Week Ahead Analysis
In the week ahead, forex market participants will need to remain agile, with several significant factors at play. The US debt ceiling deal, the behavior of 5-year US Treasury notes, and the Non-Farm Payroll data each present potential shifts in the market dynamics.
After a critical negotiation period, US President Joe Biden and House Republican Speaker Kevin McCarthy have seemingly broken the political impasse, reaching an in-principle agreement over the US debt ceiling. This landmark deal could potentially reshape the dynamics of the forex markets this week.
Historically, we’ve observed that the 5-year US Treasury Notes tend to fall after a bullish May. Given that the USD Index has shown a strong correlation with this, there’s a possibility we could see a reversal in the USD’s strength. It’s worth noting, though, that this trend is not a guarantee; various factors, including changes in fiscal policy or unexpected economic data, can disrupt established patterns
In another interesting turn of events, US Non-Farm Payroll data, a key indicator of job creation, is expected to decline this week. However, it’s essential to note that this data has surpassed expectations in the recent past, which throws a potential curveball in the analysis.
The Federal Reserve has an eye on this data, as a decrease in job creation may aid in the ongoing battle with inflation. This could impact the US central bank’s monetary policy decisions, potentially affecting interest rates and the USD’s strength.
USD Index
The price on the chart has traded through multiple technical levels and some observations included:
- The price is heading towards the 105.00 resistance level.
- Seasonally, 5 year US treasury notes falls through June, considering this is highly correlated to the USD Index, we could see it top out at 105.00.
- Over this week, traders could still remain bullish as a deal over the debt ceiling has been agreed before its June 1st deadline.
USDJPY
The price on the chart has traded through multiple technical levels and some observations included:
- The price of USDJPY continues to trade higher as the market prices in a deal to be made over the debt ceilings.
- Now this has been confirmed we could expect the price to reach the 142.00 resistance level.
- Seasonality shows JPY getting stronger through June, suggesting sellers could be waiting for the price to reject a key resistance.
AUDUSD
The price on the chart has traded through multiple technical levels and some observations included:
- On the weekly chart we can see that price has closed below the weekly range lows of 0.6575.
- This could invite further selling pressure, with sellers potentially targeting lows at 0.6200.
GOLD
The price on the chart has traded through multiple technical levels and some observations included:
- Gold is trading at the $1950.00 support zone.
- If price continues lower the next level of interest rests at $1985.00.
- However, if price consolidates here and breaks higher it could bring in fresh buying for Gold.
Have you watched our interview with USDJPY analysis? You can see it here.
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