The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap: 13th January
Friday the 13th can be unlucky for some but not the Japanese Yen as the currency continues to strengthen due to the Japanese Bond Yields breaking the central bank ceiling. This was quickly met by the central bank who intervened by buying 1.8 trillion Yen. The BoJ continues to try and hold interest rates low in a world where most central banks are hiking to get ahead of the high inflation rates globally. Japan’s inflation rate has risen to 3.8%n nearly double the central banks targets of 2%. If this continues the BoJ may have to change their low interest rate outlook.
In the US this week the Federal Reserve Chairman spoke and reaffirmed the US Central Bank’s monetary policy stance of hiking rates but at a slower pace. This wasn’t a surprise to the market and was followed by CPI data which came out as forecasted.
The USD Index traded lower this week as the Federal Reserve Chairman continued to talk of hiking rates at a slower pace. This has seen the USD index trade lower breaking down through the key lows of 103.75. The next area for sellers to target is 101.50 the lows that formed back in May 2022.
It was a fairly slow week for GBPUSD this week, the USD weakness helped the price move higher and above the 1.2200 handle. However after testing this level the price began to range showing a lack of buyers above the key resistance.
The Japanese Yen was the best performer of this week gaining strength against most currencies. The USDJPY price below the support of 131.00 and is now looking to test the lows in May of 126.50. Next week investors will be watching to see if the BoJ continues their plans to intervene in the market which could put more strength into the JPY.
We featured the price of Gold twice this week as the price looked to trade to the weekly highs of $1875.00. Once the price reached this level we identified it was likely to trade higher due to the USD Index not being at support. The price then traded through the highs and ended up reaching the next level of resistance at $1910.00. The price of Gold has been strongly correlated with the USD Index since April of 2022 and this has helped us identify where the price of Gold could trade next.
Have you watched our NZDJPY analysis? You can see it here.
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