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 had multiple Services and Manufacturing PMI data sets out of the EU, UK, and USA. The USA Sevices PMI fell for a second consecutive month, adding pressure to the USD. However, this weakness soon turned into strength, as Federal Reserve Chairman Powell announced that inflation is going to get much higher. This strong comment from the US central bank chairman suggests that the Fed will not be easing up on its aggressive rate hikes. These comments almost certainly take the 50bps hike off the table. The USD gained strength on this news, whilst the US equities markets fell.
Like with most USD pairs this week we saw the EURUSD price range. This was largely due to the poor data out of the US, to begin with. However, every rally in the EURUSD price was met by sellers, and this continued into Chairman Powell’s speech on Friday. The hawkish tone saw the price of EURUSD rally into the monthly Value Area Low, only for the price to reverse from this area swiftly. This bearish sentiment looks set to stay as the Fed outline more aggressive plans.
The USDJPY was on our watchlist this week for long opportunities after the strength meter highlighted the two currencies converging towards each other. This came after both currencies entered into the reversal zones the week prior. Looking at the chart this week, despite the majority of the week being range bound, the price failed to break back below the 135.00 high volume nodes from the weekly profiles.
The GBPUSD price also fell this week after the Federal Reserve Chairman’s speech. The GBPUSD price tested the monthly Value Area Low on multiple occasions but failed to gain any buyers above. This showed us that buyers were not interested in taking prices higher and would rather see prices continue lower.
The price of Gold reacted to the weekly value area low where we outlined sellers coming in on a previous video. However, we did not know which way Powell would send the markets in his speech. The price of Gold fell after the announcement which outlines the Fed hiking rates more aggressively. If this sentiment continues the price could retest the monthly range lows, which could potentially break.
Did you see our GOLD Analysis? You can see it here.
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