In this week’s Week Ahead Analysis we take a look at the key charts of the week with #AUDUSD, #GBPUSD, #NZDUSD and more!
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Week Ahead Analysis
High impact data nearly everyday this week could increase the volatility in the market which could play into the hands of the strengthening USD. The greenback could continue to strengthen this week as the FOMC is set to increase rates by another 50bps. The latest CPI figures could give the Federal Reserve a push to hike rates by more than 50bps, if this was to happen this could shock the market and we could see a bullish push. The FOMC Press Conference that follows the announcement will be watched closely as the central bank will outline how and if they will be more aggressive in the near future. In other central bank news the Bank of England is set to hike rates by 25bps, this could push the UK into further difficulties in relation to unemployment but the central bank needs to act against the rising inflation.
The strength meter this week outlines little change, the USD has gained strength in line with the rising inflation. The EURO moved lower from the key reversal zone which could suggest some bearish moves could form here against stronger currencies.
The AUDUSD remains on our watch list this week as the high volatility in the market could see prices move much lower. The weekly profiles highlight that the price is trading outside of the value area which can often lead to a continuation the next week. The price is nearing a previous untested point of control area at 0.7015 where we may see a small correction. The value area low and low volume point around 0.7145 could act as resistance if the price was to test this area and form bearish price action.
The GBPUSD price sank lower last week after breaking though the major lows around 1.2420, this sentiment is likely to continue going into next week which could see the price head down to 1.2200. If however the price was to pullback we would likely see the market retest the value area low around 1.2480. This market will be the subject of high volatility as we have both the US and UK central banks announcing rates.
The NZDUSD price could come under further pressure this week after the risk dissipated from the market. The price of NZDUSD closed as a strong bearish close on the weekly which suggests further downside is likely to continue into this week. The price is currently resting at an untested point of control around 0.6354, if this level breaks the price could soon test the lows at 0.6240. The price could retest the point of control of last week, if this area holds and bearish price action forms we could expect another move lower.
The S&P500 will again be watched closely by investors this week as the volatility increases. Not only this, the Federal Reserve is likely to talk about hiking rates more aggressively this week which has recently seen the stock market take a bearish turn. If the price falls we could see a retest at the low volume areas at 3850.00. If the price does pullback we could see a retest of the volume pocket at 4008.00 for selling opportunities.
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