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In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #GBPJPY, #GBPUSD and more!
Watch the video to learn more…
Week Ahead Analysis
This week all attention will be on the Federal Reserve as they plan to hike interest rates by 75bps this week which will see their interest rates rise to 3.25%. The recent CPI data showed inflation remained high which could force the Fed to hike more aggressively. If the Fed were to hike by more than 75bps this would shock the market and likely see a strong USD move.
The BoJ will announce their monetary policy statement this week which could see a talk of planned intervention. The JPY has rebounded recently showing strength on lower time frames against weaker currencies. This strength may continue if the BoJ talks of intervention and if the risk off sentiment remains.
The Swiss National Bank is forecast to hike rates again by 75bps to 0.5%. This will be the first time the bank is out of negative rates since 2011. The Swiss Franc has been strong ever since the most recent hike and will likely continue after this announcement.
The Bank of England will look to hike interest rates by 50bps this week. This will see rates rise to 2.25% as the central bank looks to fight the global inflation rate. The GBPUSD price dropped to a 40 year low with little reaction which could suggest further lows are to come.
The strength meter this week shows the USD being the strongest currency and back in a reversal zone. The JPY is still the weakest currency but remains in the reversal zone.
USD Index Analysis
The USD Index price is currently in a short term trading range on the 4hr time frame. Price is trading between 110.26 and 109.28. The USD could remain range bound this week until the rate announcement. If the USD reacts strongly to the news we could see the USD Index break the recent highs of 110.80 with the potential to see the price retest the September ‘01 lows at 111.31.
EURUSD Analysis
If the USD Index is in a range then the EURUSD price is going to highlight the same. The weekly volume profiles show a gap resting above after the CPI data around 1.0060 to 1.0100. If the price breaks out of its current trading range we could see a move higher towards this gap. If the USD remains strong then a break lower is more likely and the lows could be tested at 0.9863.
GBPUSD Analysis
The GBPUSD reached 40 year lows last week showing the lack of buyers in the GBP. This combined with the USD strength is adding pressure to the GBPUSD price. The price is currently trading back above the 1.1400 lows after making new lows of 1.1350. If the price were to rally this week we could expect sellers to be attracted to any opportunities to seek lower prices again.
GBPJPY Analysis
The GBPJPY price made new lows on the 4hr time frame as the risk sentiment switched. As stocks fell the JPY gained strength leading the GBPJPY price to break trend. The recent impulsive phase saw the price pause around 164.00, this could act as a resistance level going into next week with major lows resting at 160.65.
Did you see our Forex Market Wrap Analysis? You can see it here.
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