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In this week’s Week Ahead Analysis we take a look at the key charts of the week with #GBPUSD, #EURUSD, #AUDUSD and more!
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Week Ahead Analysis: From Powell’s Speech to RBA Meeting Minutes
As we approach a new week in the financial world, there are several key events that should be on every investor’s radar. From the Federal Reserve Chairman’s speech to the release of U.S. retail sales data and the Reserve Bank of Australia’s (RBA) meeting minutes, this week promises to shed light on various dimensions of the global economy.
At the top of the list is Federal Reserve Chairman Jerome Powell’s much-anticipated speech at the end of this week. Investors globally will be keen to see if the Chairman gives any more details away over upcoming monetary policy decisions.
Given the current climate of economic uncertainty and the ongoing debate about inflation and interest rates, Powell’s speech holds significant potential to influence markets. If the Federal Reserve decides to raise interest rates or signals an intention to do so, this could lead to considerable shifts in market sentiment.
Just before Powell’s speech, we’ll also be keeping a close eye on the US retail sales data for the month. After a decline of -1.0% in the previous month, retail sales are expected to rise by 0.8%.
This rebound could prove to be a significant catalyst, particularly for the US dollar. The USD strengthened at the end of last week, and this data could help it to strengthen further. If the retail sales data outperforms expectations, it could signal robust consumer spending — a key driver of economic growth — and further boost the greenback.
Moving away from the US, we turn our attention to Australia, where the Reserve Bank of Australia’s (RBA) meeting minutes are due to be released. This holds particular significance following the recent surprise decision by the RBA to raise interest rates.
The meeting minutes will give investors an insight into the reasoning behind this shock move. Understanding the RBA’s thought process could prove crucial for predicting its future monetary policy and the potential impact on Australian markets and the AUD.
USD Index
The price on the chart has traded through multiple technical levels and some observations included:
- The USD Index has closed above the minor range highs at 102.00.
- This signals to the market a potential for the USD to strengthen further.
- USD investors could see this as an opportunity for the USD Index to move towards the 103.00 level.
EURUSD
The price on the chart has traded through multiple technical levels and some observations included:
- The opposite chart of the USD Index is EURUSD.
- Price failed to trade above the key resistance level of 1.1100.
- This has led to the price trading lower, breaking through key lows.
- Investors looking to buy the USD could do so against the EUR if the price continues to trade down to support at 1.0750.
GBPUSD
The price on the chart has traded through multiple technical levels and some observations included:
- The price of cable is trading within a bullish channel at the 1.2650 resistance.
- A break of this channel would see selling pressure enter this forex pair with sellers targets sowing lows at 1.1850.
- Seasonally, the price of GBPUSD typically falls, adding confluence to the idea of the GBPUSD prices trading lower.
AUDUSD
The price on the chart has traded through multiple technical levels and some observations included:
- Despite the RBA’s shock decision to raise interest rates, the AUD has weakened.
- This is typical of this time of year, and if the price continues lower it could reach the range lows at 0.6575.
- A break of this range low could invite further selling pressure with the next support at 0.6200.
Have you watched our interview with GBPUSD analysis? You can see it here.
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