In this week’s Week Ahead Analysis we take a look at the key charts of the week with #GBPUSD, #USDJPY, #USDCHF and more!
Watch the video to learn more…
Week Ahead Analysis
This week the news calendar is full of high impact events that could add volatility into the market. In the US we see PPI and Retail sales data released with both sets of data forecast to come in higher than previous. However, inflation data has come in lower in the US which could be reflected here again this week.
In other news CPI data will be released out of Canada which is forecasted to rise from the previous 0.1% to 0.7%. The Bank of Canada has slowed down the pace of tightening in their previous meeting but a rise in inflation could persuade the central bank to hike strongly again.
The strength meter this week shows the USD is the weakest currency but in the reversal zone at -6. The CHF and JPY outperformed most of the other currencies both gaining 5-6 places on the strength meter.
USD Index Analysis
The USD Index is trading below the key support of 108.00 and if this momentum is to continue it could be a poor month for the greenback. The next support level rests at 105.00 and is likely to be tested this week if sellers are active on any rallies on the index. A breach of the support at 105.00 could see price trade back towards the key 101.00 level.
Last week’s GDP data hasn’t had a negative effect on the GBPUSD price; instead, cable is trading through the 1.1800 resistance handle. If the price pulls back to the previous highs at 1.1600 we could see buyers step in on a trend reversal opportunity. A break above the 1.1800 level will see buyers looking to push the price to the recent highs of 1.2200.
USDJPY fell aggressively last week as the USD weakened and JPY rallied. This saw the price fall from the 150.00 highs and trade through the support levels of 145.00 and 142.00. This leaves the support of the trendline and horizontal at 138.00 the next point of interest for the major forex pair. If the price forms a lower time frame change of trend here we could look for short term rallies in the market.
The price of USDCHF is one to watch this week and the price fell from parity aggressively last week. The strength meter highlights the CHF as one of the strongest currencies of last week which could follow through into this week. After such a strong move we could anticipate a pullback for price as it does sit just below support of 0.9450. However, any rallies here could be met with sellers looking to push the price to the next area of support at 0.9100.
Did you see our Forex Market Wrap Analysis? You can see it here.