In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #GBPUSD, #NZDUSD and more!
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Week Ahead Analysis
This week we will see what the Federal Reserve will do with interest rates. The FOMC is projected to hike interest rates by 25bps as outlined by the Federal Reserve Chairman Jerome Powell earlier in the month. However recent CPI figures could force the Fed to act more aggressively and if they shock the market with a 50bps jump we could see the USD strengthen further. The Bank of England is also set to announce rates this week and are also looking to hike interest rates by 25bps. The GBP has been the worst performing currency of late and could continue up until this announcement.
The strength meter this week highlights the AUD and NZD as the strongest markets but both in reversal areas. The weakest currency is the GBP but is also in a reversal zone. This means that we could either see the trends continue or reverse on GBPAUD and GBPNZD this week.
With the Federal Reserve set to announce an increase in interest rates this week we could see the EURUSD price move lower. Currently the price is trading at a high volume area of last week which could initially offer support for traders. The key to the market this week will be the current highs and lows. If the the Fed doesn’t disappoint the market we could see the USD strengthen and the price of EURUSD break lower. If however they do disappoint we could see the market reverse and price break above the key highs.
GBPUSD has been falling aggressively over the past couple of weeks and could continue this week as buyers do not seem willing to buy around these prices. The weekly volume profile highlights a couple of levels of interest going into this week. The point of control at 1.3109 could offer resistance in the short term as well at 1.3168 as both areas are high volume levels of the previous week.
The price of GBPAUD could be one to watch this week according to the strength meter. The strength meter suggests this market could continue its path lower or reverse. Looking at the chart the market has moved over 900 pips in a short period of time which could often lead to a reversal. The key highs around 1.8060 will be of interest this week especially if the price can trade above this area. A break and close above will show the potential for the market to reverse in the short term.
The NZDUSD is another currency pair that is of interest if the NZD does top out at the high end of the strength meter. The price has recently retested the major supply zone around 0.6890 and sold off showing that sellers are willing to trade from these higher prices. The weekly volume shows that the majority of trading was done in the lower half which shows a swing in momentum. If the price breaks through the lows around 0.6800 we could see a continuation of the downward move.
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