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In this week’s Week Ahead Analysis we take a look at the key charts of the week with #USDJPY, #GBPUSD, #GOLD and more!
Watch the video to learn more…
Forex Week Ahead Analysis: 5th June
This week is set to be an exciting one in the world of Forex, thanks to several key developments that have the potential to shift the balance of power in global markets.
To kick things off, US President Joe Biden has signed a crucial debt ceiling bill, raising the limit and effectively staving off a potential default. This move has sparked widespread relief among investors, as the specter of a default has been creating significant unease within the global financial markets. However, the long-term implications of this increased debt ceiling remain to be seen.
Turning to the Federal Reserve, the probability of a rate hike has risen substantially. Market analysts are now pricing in a 75% chance that the Fed will hike rates once again, potentially by at least another 25 basis points (bps). This significant shift in sentiment is largely due to the strong Non-Farm Payroll (NFP) data, which revealed a robust increase in the number of jobs created – from 294k to 339k. This persistent strength in the labor market is putting pressure on the Fed to further tighten its monetary policy, which is likely to shake up the forex market.
On the other side of the Pacific, the Reserve Bank of Australia (RBA) is expected to hold its ground, leaving rates unchanged at 3.85%. This comes despite inflation rates exceeding their target range, a move that could lead to increased volatility in the AUDUSD pair.
In Canada, similar expectations are set for the Bank of Canada (BoC). Analysts predict that the BoC will also hold rates steady at 4.50%. However, this forecast is set against a backdrop of strong Q1 GDP figures, which outperformed the BoC’s expectations, and an above-target Consumer Price Index (CPI). Moreover, April’s job data pointed to an upswing in employment, while unemployment remained steady at 5.0%. Given this economic performance, there’s room for a surprise rate hike, which could provide an unexpected jolt to the USDCAD pair.
USD Index
The price on the chart has traded through multiple technical levels and some observations included:
- Price found support at the previous highs at 103.50.
- NFP numbers strengthened the USD, if this sentiment remains, prices could trade higher.
- USD Index could head to the next resistance point of 105.00.
USDJPY
The price on the chart has traded through multiple technical levels and some observations included:
- Price of USDJPY and USD Index look to be in close correlation.
- Price has also found support at previous highs, and if it trades higher it could retest the November 2022 highs at 142.00.
GBPUSD
The price on the chart has traded through multiple technical levels and some observations included:
- Price rejected the resistance at 1.2500 highs.
- This level also holds confluence with a daily bullish channel resistance.
- If price moves lower from this level it could retest 1.2350.
GOLD
The price on the chart has traded through multiple technical levels and some observations included:
- Price of Gold took a bearish turn after the USD bulls returned.
- If price trades through the $1950.00 support, sellers could target lower support of $1890.00.
Have you watched our interview with AUDUSD analysis? You can see it here.
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