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In this week’s Forex Week Ahead Analysis we take a look at the key charts of the week with #GBPUSD, #AUDUSD, #AUDJPY and more!
Watch the video to learn more…
Forex Week Ahead Analysis: Central Banks Take Center Stage
As we step into a new week in the realm of foreign exchange, the spotlight falls on the upcoming decisions from two major central banks – The Bank of England (BoE) and the Swiss National Bank (SNB). Moreover, the testimony of Fed Chairman Powell will also take center stage, potentially swaying the currency markets in one direction or another. This week promises to be a pivotal one with significant implications for Forex traders worldwide.
Starting with the UK, the Bank of England is widely forecasted to raise interest rates from 4.50% to 4.75%, marking another step in its campaign to tackle the persistent core inflation that has been troubling the UK economy. Inflationary pressures have been steadily mounting, and it appears the BoE is reaching a consensus that rates need to climb higher to maintain economic stability.
The repercussions of the anticipated rate hike in the UK can have a profound impact on the GBP. If the BoE does follow through with the increase, it could boost the Pound, as higher interest rates often attract more foreign capital, which in turn strengthens the currency. However, traders should pay close attention to the accompanying statement and press conference as they often provide clues on the central bank’s future monetary policy stance.
Across the pond, the US Federal Reserve’s Chairman, Jerome Powell, will be providing his testimony this week. With the Fed’s influence on global monetary policy, any commentary from Powell will be scrutinized heavily. His words carry the potential to drive significant currency market movements, particularly if he provides fresh insights into the Fed’s outlook on the US economy and its monetary policy. Forex traders should brace themselves for potential USD volatility during this period.
Meanwhile, in Switzerland, the Swiss National Bank (SNB) is projected to hike its interest rates from 1.50% to 1.75%. This move reflects the SNB’s stance on rising inflation rates, this will bring rates to their highest in over 10+ years.
USD Index
The price on the chart has traded through multiple technical levels and some observations included:
- Price traded through the 103.00 support which could act as resistance next week.
- The weekly chart shows the price as a bearish candle which suggests the price could continue down towards the lows of 101.00.
GBPUSD
The price on the chart has traded through multiple technical levels and some observations included:
- GBP strength drove prices of GBPUSD above the key weekly highs of 1.2650.
- This could see the price trade to 1.3000.
- Traders could be looking for the price to retest supporting levels for opportunities higher.
AUDUSD
The price on the chart has traded through multiple technical levels and some observations included:
- The Australian Dollar was one of the best performing currencies last week.
- AUDUSD is trading below the 0.6900 resistance but above the 0.6800 support.
- This could be used by traders to trade the trend this week.
AUDJPY
The price on the chart has traded through multiple technical levels and some observations included:
- The price of AUDJPY soared through the 95.00 major resistance level.
- The risk on environment could continue seeing AUDJPY test the 2022 highs at 98.50.
Have you watched our interview with USD Index analysis? You can see it here.
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