In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #USDJPY, #GOLD and more!
Watch the video to learn more…
Week Ahead Analysis
In the news this week out of the US we have annual and monthly Core Retails sales data. The forecast shows a decline which suggests demand is doing the same. Following this the Federal Reserve Meeting Minutes will be released where we could see the Fed outline the 50bps hike is now more likely after poor CPI data. In other central bank news this week, the RBNZ are forecast to hike rates by 50bps. The last time the RBNZ did this we saw the NZD lose strength as the announcement was priced into the market, which could happen again here.
The strength meter continues to highlight the JPY is the strongest currency but in a reversal zone. The NZD also outperformed most of its counterparts and could be one to watch for further bullish momentum this week. We have already begun to see the JPY weaken against most currencies so a reversal here looks more likely. The USD and EURO are the weakest currencies with both landing themselves into the reversal zones. The USD reversed its CPI weakness recently which could continue going into this week.
The EURUSD price will open within the weekly value area this week which can often lead to the market ranging between VAL and VAH. However, if the EURO remains weak and the USD begins to strengthen we could see a breakout of the weekly VAL and a continued move to the downside. One thing to watch this week could be a move back to the Friday VAH for a rejection, if sellers step in here we could see a short opportunity form back to the VAL.
The USDJPY weekly profile shows a gap between 133.89 and 134.38, this gap could be filled this week if the JPY reverses on the strength meter. A break of 133.89 could offer long opportunities to the other side as well as the untested weekly point of control and maybe even the value area high. Alternatively, if the price was to retest the weekly value area low and Fridays point of control we could see buyers step in here.
The NZDJPY is the one to watch from the strength meter this week. The NZD strengthened significantly last week and could continue against weakening currencies, or currencies in reversal zones like the JPY. Currently, the price is trading above last week’s value area high which suggests more upside is to come. The high volume node at 86.00 could offer short term support for long opportunities.
Gold could be an interesting market to watch this week, recently the Fed has talked of less aggressive rate hikes to come which should help lift the price of Gold. In the past, more aggressive hikes have seen the price of Gold move lower. A break above the recent lows and high volume level at $1806.30 would offer buyers an opportunity to trade back to the untested weekly point of control at $1816.90.
Did you see our Forex Market Wrap analysis? You can see it here.
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