The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap Analysis
The Forex markets have given us some great opportunities this week as the volatility has been growing, the markets have moved into a risk on mode with stocks starting to recover and safe haven currencies suffering. The biggest news of the week was from two central banks, the federal reserve and the Bank of England. The Federal Reserve was up first which saw the central bank hike rates by 25bps to 0.5%. This was highly anticipated by the market as the fed chairman Jerome Powell said this was to be the outcome the previous month. The rising inflation rate in the US is of concern and Powell suggested the Fed will become more aggressive if they see the need to but at the moment they do not. The Bank of England then also hiked rates by 25bps to 0.75% on track with their plans to hike rates 4 times this year. The BoE suggested that the hikes may not be over any time soon and stated they could continue to hike rates to tackle the rising inflation.
The GBP was in focus for us this week not only due to the central bank hiking rates but because of the strength meter. The currency strength meter suggested that the GBP could begin to find strength after a recent poor run of form. The GBPUSD market now also suggests a reversal with the price rebounding from the 1.3000 lows and forming a key reversal pattern which traders could look to as bullish price action.
In a video this week we pointed out the potential for the GBPJPY price to rise. The recent move back to risk on has seen the Japanese Yen fall sharply against its counterparts. This made us look to GBPJPY for bullish opportunities as the price looked to trade back to the highs of its major range.
AUDUSD surprised us this week as the currency strength meter suggested that the AUD could be nearing a top and could lose some of its recent strength. However, despite some early weakness in the market the AUDUSD price rebounded sharply from its lows and looks to be heading back higher towards the major highs.
The price of Silver is one to watch in line with the seasonal patterns. The seasonal heat maps suggest that the price of Silver and other precious metals fall around this time of year. Not only that but the commitment of trader reports highlight that the commercials are holding significant short positions at the moment which could see the current trend of the market reverse. Looking at the chart we can see that the price formed a bearish head and shoulders pattern and the market has now rejected the neckline showing a potential to move lower.
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