The Forex Market Wrap is here!
Watch the video to learn what key levels have been hit this week!
Forex Market Wrap Analysis
The USD was the one to watch this week as we had high volatility across the market as well as key data out of the Federal Reserve. The Federal Reserve hikes interest rates by 75 bps bringing the Federal Funds Rate up to 4.00%. What followed in the press conference sparked the USD into a bullish move. Federal Reserve Chairman Powell said that slowing the pace of tightening is likely however this would see them hike rates for longer. This suggested that the Federal Reserve is planning to hike rates above the forecasted levels. Non-Farm employment change pushed the USD back negative as the numbers came in at 216K with an increase in average hourly earnings but also an increase in unemployment.
In other news the Bank of England hiked interest rates by 75 bps as well bringing their rates to 3.00%. This was met with the Bank of England Governor saying the UK is in a difficult position and that the UK is in a 2 year recession.
The RBA also hiked rates this week by 25 bps seeing the central bank slowing down the pace of tightening like many other central banks.
The GBPUSD price fell this week after failing at the 1.1600 handle. Fundamentally the GBPUSD fell due to the positive FOMC and negative BoE. This saw the price drive back below the support of 1.1400. If the price remains below this level and the sellers reject the 1.1400 handle then a move back to the 1.0925 wouldn’t be a surprise for those trading cable.
The NZDUSD price was one to watch this week as the NZD was one of the strongest currencies and the USD was one of the worst performing currencies last week. Looking at the price action we identified the potential for the price to trade above the 0.5870 handle however, when the price reached this level we failed to close above it. This led to the price retesting the lows and previous swing highs at 0.5760. After NFP data the price has now traded back above the key highs. If this is sustained a move to the next resistance of 0.6000 is likely.
The EURJPY price didn’t move higher as expected this week instead it traded back below the 145.50 handle. Price then found support at the 144.00 previous highs and has since traded higher but the momentum of this market seems to have slowed.
Our focus for Gold this week was to see a move from the recently formed lows to the major key lows. That is exactly what we saw this week, the price rallied back to the $1660.00 lows finding resistance after the FOMC announcement and falling to the $1620.00 lows. Since then the USD has fallen seeing the price of GOLD move higher back towards the key level of $1675.00. If this momentum continues and price trades above this level the market could swing to the upside.
Did you see our GBPUSD Analysis? You can see it here.
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