The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap
This week in the forex market, the Consumer Price Index (CPI) rose from 1.8% to 1.9% quarter-over-quarter, which was a slight surprise to the market as expectations had it coming in at 1.6%. This helped the Australian Dollar to remain strong.
In other news, New Zealand’s CPI figures fell from 2.2% to 1.4%, which would be welcomed by the Reserve Bank of New Zealand (RBNZ). This decrease in inflation could potentially lead to a decrease in interest rates, which could affect the value of the NZD.
In central bank news, the Bank of Canada hiked interest rates from 4.25% to 4.5%. This move was widely expected by the market and is a sign of the bank’s confidence in the Canadian economy. This increase in interest rates could lead to a strengthening of the Canadian dollar.
The price of EURUSD came into the highs in line with the USD Index coming into supporting lows. The USD Index found support which caused the EURUSD price to trade lower. However, the price is in a strong upward trend at the moment which is likely to continue if the price can trade through these minor highs. The 1.1100 level would be targets for any traders long being the next level of resistance. The ECB have recently talked of continuing to hike rates by 50 bps in the next two meetings which could keep the EURO strong in the short term.
The price of GBPUSD found resistance at the 1.2425 handle this week, failing to break a higher. This was largely due to the USD finding support however the price now looks to be forming a double top pattern on the daily time frame. If this holds this could lead to the price of cable moving lower towards the 1.2250. A break of these lows would almost certainly see the price reach the 1.2200 handle depending on other factors.
The GBPJPY chart was one to watch this week due to the currency strength meter, we saw the JPY falling from the highs weakening and the GBP gaining strength. However, the price failed to trade through the highs this week and instead ended up consolidating below them. If the price can break higher then this would lead to an opportunity to see the price move to the range highs. Alternatively, if the price fails here we could see a move back to the daily lows.
The price of AUDUSD rallied higher this week into the key resistance of 0.7100. This was largely due to the Australian CPI data which saw an increase beating forecasts. If the RBA is going to act on this information we could see the AUD remain strong. This could lead to the price breaking out of the highs at 0.7100 and moving higher.
Overall, it was a relatively quiet week in the forex market, with the focus on inflation and central bank decisions. As we move forward, traders will be closely watching for any further developments in these areas and how they may impact the value of various currencies.
Have you watched our EURUSD analysis? You can see it here.
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