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The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap
This week the market was loaded with red folder announcements including the highly anticipated Federal Reserve rate decision. Beginning with this data the Federal Reserve hiked interest rates by 50 bps to 4.50%. In the FOMC press conference the Federal Reserve Chairman stated that the Fed will slow the pace of tightening but bring the overall rates up towards 5.10%. This was backed up by the CPI data which showed further declines in inflation.
In other central bank news the EURO gained significantly this week after the ECB announced a rate hike of 50 bps to 2.50%. Following this announcement the ECB President Lagarde stated the European central bank is willing to hike rates again in 50 bps increments to fight the rising inflation.
The Bank of England has also hiked rates by 50 bps seeing their rates move to 3.50%. The official bank votes came in a 7-0-2 which suggests that the central bank may begin to slow the pace of rates in future meetings.
The Swiss Franc strengthened this week as the SNB hiked rates again from 0.50% to 1.00% making it the third consecutive rate hike since March 2022.
USD Index
The USD Index continued to trade lower this week as the Federal Reserve made its announcement of slowing the pace of tightening. In our week ahead analysis video we highlighted the opportunity for the USD Index to trade to 103.50. Once the price tested this level the market rebounded working within a slight bearish channel on the daily time frame. A break above this channel could see the price move back towards the 108.00 highs. However, the market is taking this latest news by the Fed negatively which could see the price trade even lower.
GBPUSD Analysis
The price of GBPUSD remained within a bullish channel range this week despite the Bank of England hiking interest rates. Price climbed to the highs of 1.2400 before seeing a move to the downside. Now the price is at the bullish channel lows we could expect to see a move higher again.
NZDUSD Analysis
The price of NZDUSD was expected to reject the 0.6450 level this week. The price attempted to find buyers above this level but failed leading the market trading back towards the recent swing lows that formed around 0.6280. The NZD has been one of the strongest currencies of late which was highlighted by the strength meter. However, now the price of NZDUSD is at an important resistance zone, we could expect some weakness to enter the market in the short term.
GOLD Analysis
The price of Gold remained below the $1800.00 level this week despite breaking through the key level after the US CPI data. Since then the price has fallen which is in line with the USD Index finding support at the 103.50 level. If however the USD continued to weaken, then the price of Gold could re-emerge above the $1800.00 level and continue higher.
Did you see our EURJPY Analysis? You can see it here.
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