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 volatility rise as we had significant red letter data releases. Some significant news came from the Bank of Japan this week as they intervened in the market buying JPY for the first time since 1998. This saw the JPY strengthen in the market which will likely remain unchanged. This can also be down to the recent rise in risk sentiment from Russia stating they are willing to use nuclear means to protect themselves. We have also seen Russia part-mobilize drafting in Army reservists in the war against Ukraine, this suggests that Russia intends to add to its army. This was felt in the markets with volatility rising.
In other news we had multiple rate rises across the globe from the Bank of England, Swiss National Bank and Federal Reserve. All central banks are referring to the climbing inflation rates as reasoning behind the hikes. Many economists see the Federal Funds Rate in the US at 5% by the end of the year up from the current 3.25%. This should see further aggressive hikes to come from the Fed.
USD Index Analysis
The USD Index was on our watchlist this week as we expected to see the USD remain strong. Price broke out of the 4hr consolidation that formed at the end of last week. This saw the price break out of multiple levels including the current 2022 highs and September 2001 lows. Now the price is trading into new highs around 112.00 we could see buyers drive prices to the next resistance around 118.00.
The EURUSD price followed a similar path to the USD Index this week by trading out of the 4hr consolidation zone. The break below the 0.9955 lows invited selling pressure with price moving quickly towards and through the key swing lows at 0.9863. Now the price is through this area of support we would expect a continuation of the trend towards the 0.9600 key support.
The GBPUSD price traded through the 1.1350 lows of last week and continued to push lower. The price reached the 1.1050 level before finding some support. Now the price is at these levels we could expect it to reach the 1985 lows. If we see the trend continue we could look to sell rallies around 1.1200 which are the previous 4hr lows.
The GBPJPY price was on our watch list this week as we expected the JPY to strengthen from the strength meter. We highlighted in the week ahead analysis video that the 164.00 held support previously which could act as resistance if the price was to retest it. This level then held as resistance again after the price rallied momentarily when the BoJ announced the intervention. The price has now traded through the recent lows of 160.65.
Did you see our EURJPY Analysis? You can see it here.
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