In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #EURJPY, #AUDUSD and more!
Watch the video to learn more…
Week Ahead Analysis: 10th October
The second half of the week will be where most investors will be watching as the US is set to announce PPI, CPI and Core Retail Sales data. This combined with the FOMC meeting minutes could make for a high volatility end to the week. The forecasts suggest further growth in the US with PPI and CPI and Core retail sales expected to rise. If this does happen then the Federal Reserve will have to look at hiking rates more aggressively again as investors will be looking for a strong response to continual growth. The FOMC meeting minutes will be interesting to watch for the language the Fed uses before the CPI and Retail sales data is announced.
In other news the UK Bank of England Governor Bailey is expected to speak twice this week and will likely outline the recent negative GBP. The central bank Governor could announce the next steps for the BoE in order to try and prevent the GBP falling further.
The strength meter this week shows the USD as the strongest currency which is unlikely to change at the moment. The weakest currency of last week was the EURO after reaching the reversal zone. The JPY has climbed back above the 0 line on the strength meter suggesting that the strength is still to come.
The price of EURUSD rejected the key parity level last week and has since continued to form lower highs and lows. If this sentiment is to remain we will likely see sellers step in at previous levels of support turned resistance around 0.9850. If the price rejects the recent 4hr swing lows and sellers form bearish price action we could see them drive prices towards the key swing lows of 0.9600.
Recently the RBA announced a rate hike of 25bps which left investors disappointed. The expectation was for the central bank to hike rates by 50bps. The slowing down of tightening left the AUD open to sellers. The price against the USD failed to make any new highs instead seeing the price trade through the 0.6400 level. If the risk sentiment we saw towards the end of last week remains then the price could continue to hold below this level looking for lower support levels.
The price of EURJPY could be one to watch this week as the strength meter shows the Euro weakening and the JPY strengthening. Looking at the 4hr time frame we can see that the price has recently formed new lows. This would offer selling opportunities if the price were to trade back to previous levels of support. Price remaining bearish could see a move below the lows at 140.75.
The price of Gold was on our watchlist last week as we expected the price to trade lower. However the USD weakness drove the prices higher seeing a top from at the resistance level of $1730.00. If this level holds and sellers re-enter the market on USD strength we could expect sellers to drive the price back to the $1675.00 highs. Alternatively, if the market sees Gold as a safe haven asset once again, the price breaking through the $1730.00 would open the doors for buyers to step in.
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