The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap
This week we saw multiple high impact news events including three rate statements and multiple inflationary announcements. The USD and GBP inflation rose this week causing both currencies to strengthen. GBP was high on watchlists this week for long opportunities and this data helped fuel the GBP bulls this week. The RBNZ hiked interest rates to 1.5% which caused the NZD to fall. Investors think the central bank is front running rate hikes in order to be able to decrease rates in the future. The Bank of Canada also raised rates in line with forecasts as the Canadian dollar remains strong. Finally, the ECB left rates unchanged at 0.00% as the European central bank wishes to remain flexible.
The USD index continues to rise this week as inflation continues to put pressure on the Federal Reserve to act more aggressively with their interest rates. The USD did initially bounce from the key resistance of $100.50 but the market soon recovered as retail sales figures came in higher than forecasted. If the price remains above the $100.00 level we could expect the USD to remain bullish.
GBPUSD was on our watchlist this week as the GBP seasonally is strong as well as CoT reports suggesting that the market will move higher. The chart shows that the price is forming bullish divergence on the RSI which suggests a reversal is pending. The price is currently trading above the 1.3100 level and if it holds we can see further long opportunities.
The NZDUSD price closed bearish last week offering short opportunities, the 4hr trend continued to form lower lows and lower highs. The price failed to reach the key supply zone but price continued to break into lows offering short trading ideas.
The price of GBPNZD was high on the watchlist this week as the strength meter showed the NZD weakening and the GBP gaining strength offering long opportunities. This price rallied and broke through key highs suggesting the reversal is forming in the market. The weekly chart shows a strong bullish close with the RSI moving out of the oversold zone.
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