The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap Analysis
What an interesting week in the currency markets, the Federal Reserves rate announcement was the hot topic. The FOMC raised interest rates by 75bps to 2.5%. In the press conference that followed, Federal Reserve Chairman Jerome Powell stated that further rate increase will slow. He also stated that they are attempting to avoid recession and think they can achieve it. However, GDP was negative for another quarter, which analysts often use to identify a recession. The Fed also highlighted that their main concern was Price Stability and expected Employment to soften.
The EURUSD was one to watch this week ahead of the FOMC data. However, the market remained largely range bound within last week’s range. This was a slight shock as the USD weakened significantly and a breakout higher was expected. If the price however breaks through this current range we could expect a large breakout. Price is currently capped at the 1.0280 highs, but if the price was to break this level we could see sellers leave the market.
The GBPUSD moved as expected this week, in the week ahead analysis video we identified the weekly bullish close. This showed us that the price was more likely to retrace back to the weekly lows. On the 4hr time frame the price broke through a key reversal pattern which saw strong buyers enter the market. This rally saw the price retest the weekly lows, and currently the price is finding resistance here. However, if the USD were to weaken further the GBPUSD price could continue to move higher.
The JPY strength came into the market this week perhaps due to the underlying pressures in the market. The US10YR Yields also fell lower adding correlation to the USDJPY move. US GDP was negative for another quarter again showing we’re either in or going into a recession. This can strengthen the JPY as it is a safe haven currency. In our previous analysis we identified the previous lows as an area for the price to turn, sellers did enter the market here and we saw a significant move lower.
The price of GOLD moved higher again for a second week after retesting the lows of the range. The price found a base after forming a technical consolidation pattern, once the FOMC news was announced, the price of Gold broke the consolidation and moved higher. Again, with GDP moving lower for another quarter we could see Gold benefit from being a safe haven asset.
Did you see our EURCHF analysis? You can see it here.
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