The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap Analysis
In the news this week we saw two central banks announce rates with the RBA leaving rates unchanged at 0.1% and the BoC hiking rates to 0.5%. The Bank of Canada also stated that they will likely hike rates further and could do so aggressively with a 50bps jump.
In other news the Federal Reserve Chairman Jerome Powell left investors disappointed as he testified and said that a 50bps jump in the next meeting was highly unlikely and we will see more like a 25bps jump instead as they look to manage risk. Inflation in the US is rising and they will have to act if they want to control the rate in which it expands.
This news however was largely overshadowed by the escalating war between Russia and Ukraine. News of Russia targeting the one of the largest nuclear power plants in Europe within Ukraine pushed the markets into a risk off mood with EURO and GBP suffering and JPY and USD gaining. If this sentiment continues we could see these currencies continue their current paths.
The USD Index rallied and broke the highs of $97.00 this week as expected as the risk off markets took hold. This doesn’t show signs of slowing down at the moment and we could see the USD Index rally further to the $100.00 levels in the near future.
We featured GBPUSD this week in our week ahead analysis video as the strength meter highlighted the decline in the currency. We expected the GBPUSD price to move lower and the price did sell off from key supply zones this week. If the market sentiment continues we could see the GBPUSD decline further.
USDJPY was another market we focused on this week as the Japanese Yen usually strengthens in times of uncertainty. Despite the USD strength as well the JPY is seen as a safe haven due to its low or negative interest rates. The price retested the major swing highs and the market fell from them aggressively showing that sellers were waiting for an opportunity around the highs.
The GBPJPY price fell in line with our expectations this week as not only was the GBP the weakest on the strength meter but the price had formed a large-scale head and shoulders pattern. The market didn’t reach the neckline of the pattern before selling off again showing the weakness in the market. This looks set to continue next week and we could see opportunities form If the markets rally.
Did you see our latest analysis? you can see it here.
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