The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap Analysis
This week investors would have been looking to the US retail sales for positivity for a rebound in the stock markets but they were left disappointed. Retail sales fell below forecasts and the stock markets continued to move lower which took the risk out of the markets. Not only this but the USD also reversed its strength this week in line with the strength meter.
In other news the UK saw inflation rise again adding further pressure to the Bank of England. The unemployment rate in the UK is steady but high which will only worsen if the central bank tries to control inflation rates by raising interest rates.
The GBPUSD price rallied from the previous swing lows in line with our expectations. The 4hr time frame shows price forming a new high which could lead to further opportunities going into the next week. We can see that strong demand came into the market which shows us that institutions are looking to buy the GBP currently in line with the Commitment of Trader data.
The price of USDJPY was one to watch going into this week due to the recent bearish weekly candle that formed. Not only this but the 10YR US Bond Yields found resistance and started to reverse and is strongly correlated with USDJPY. This combined with the strength meter highlighting the JPY gaining strength offered an opportunity short this week. We outlined the key volume levels from the weekly data and the price broke the value area of the week before and continued to test the lows.
The price of Gold was expected to rise this week if the USD weakened as it did from the highs on the USD Index. The price formed a new high on the 4hr time frame which shows that the trend could be reversing for the price of Gold and that we could expect further long opportunities to form.
The stock markets couldn’t sustain the early rally this week and prices soon fell after poor retail sales were announced. This momentum looks set to continue in the short term unless the market can find buyers at this support zone. For this we would need to see a rally form and a break in the 4hr trend in order to confirm buyers were stepping into the market.
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