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 we saw a significant shift in the market sentiment as central bank governors provided huge volatility towards the end of the week. The Bank of England Governor Bailey said that the central bank will not hike interest rates as aggressively due to the rising risk of recession. These comments were unexpected and shook the market into shifting into a risk off sentiment. The Federal Reserve Chairman Jerome Powell said that the Fed will likely hike rates more aggressively, quite the opposite to the Bank of England. This kept the USD bullish and saw most major USD pairs make significant moves.
The GBPUSD price was looking to move higher this week until the unexpected comments came from the Bank of England. This sent the price falling and breaking through major key levels like the 1.3000 we expected to see buyers remain on this week. These comments from the BoE are extremely dovish which could lead to a break lower in the GBP despite the previous bullish factors. With the Fed announcing a 50bps hike in May the USD will likely strengthen further causing the GBPUSD price to move lower.
The NZDUSD price was on our watchlist this week due to the strength meter highlighting the NZD getting weaker and the USD getting stronger. This combined with the weekly bearish price action suggested a move lower was more likely going into this week. The price continued to fall and the 4hr time frame made new lows which could offer further opportunities next week.
The AUDUSD price followed a similar path to the NZDUSD, the price broke lower after retesting key resistance levels. The 4hr time frame showed the price forming a double top pattern at a key supply zone offering short trading opportunities. The price has now made a new low on the 4hr time frame which could see further opportunities going forward.
The NZDJPY was on our watchlist going into this week as the JPY was at an extreme low on the strength meter. In order for the JPY to strengthen we needed to see the stock market fall and the US10YR bond yields to find resistance. With the heightened volatility in the markets we saw the JPY get stronger. The NZDJPY weekly chart shows the price forming a bearish rejection of the highs suggesting a reversal is now likely.
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