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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 Analysis
The ECB hiked interest rates for the first time in 11 years, the 50bps hike beat expectations from investors. Risk in Europe remains high despite the restart of the Nord Stream 1 pipeline. The pipeline is running at 40% capacity, and Putin could use the pipeline to put pressure on the EU. These outside risks could see the Euro continue to weaken. CPI rose to 9.4% in the UK showing another rise in inflation, the Bank of England has talked of being more aggressive with rates in the near future.
EURUSD Analysis
The EURUSD price broke higher this week in line with our overall expectations. The lack of high-impact data in the US could have helped with its recent weakness. Also with rising inflation in the US the market could be pricing in a 100bps hike, when in fact we could be seeing a less aggressive 75bps hike. This would leave investors disappointed and the USD would weaken. Not only this but the ECB raised rates helping the Euro lift from the lows. The 4hr trend shows the price is forming a strong retracement phase, forming higher highs and higher lows. This could of long opportunities if the price were to trend back to key resistance.
AUDUSD Analysis
The price of AUDUSD continued higher after the price traded through the 0.6800 highs. In the week ahead analysis video, we identified long opportunities above these highs. The price was likely to move higher here due to the risk returning to the market. The US stock market was a big factor in looking for risk-on sentiment, and when the price traded through the highs the USD weakened and AUD strengthened. The price is, however, back at a key technical area of resistance, this could see a retracement move form in the short term.
SILVER Analysis
Silver was on our watchlist this week due to the strong seasonal pattern. On average the precious metals best performing month is in July. This combined with the recent bullish rejection of monthly support could see the price move higher. In the week ahead analysis we identified the double bottom pattern, and the neckline of the pattern is where price found support.
S&P500
The US stock market looked bullish after last week’s close, the market was trading in a tight range. The high of the range was broken leading to more risk in the market. This would have been the main driver in higher prices across the risk assets. The price action after the break out is concerning to buyers, the low-ranging candles suggest buyers aren’t aggressive here and we could see a move back into the range form shortly.
Did you see our GBPUSD analysis? You can see it here.
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