In this week’s Week Ahead Analysis we take a look at the key charts of the week with #GBPUSD, #USDJPY, #EURJPY and more!
Watch the video to learn more…
Week Ahead Analysis
In the news this week we have rate announcements from two central banks. Both the Bank of Canada and Bank of England are forecast to hike rates by 50bps each. The US will see its fair share of data again this week with ISM Services and Manufacturing PMI set to release. The trend in these numbers is declining but forecasts show a number remaining above 50. A number above 50 indicates an economy is still growing but at a slower pace. At the end of the week we have Non-Farm Payroll. In the recent Federal Reserve Press Conference, Chairman Jerome Powell stated that they expect to see softer jobs numbers which isn’t a concern for them as they focus more on Price Stability.
The strength meter this week highlights the risk off environment the market is in. The JPY ended last week as the strongest currency with the GBP following behind. The EURO, USD and CAD were the worst performing currencies. If the USD continues to fall we could see the reversals continue for the major forex pairs.
The GBPUSD monthly candle closed back above the previous two month lows, this shows a potential opportunity for the price to reverse for the next month. The USD has been reacting negatively to the recent Fed announcement, this could see GBPUSD continue to retrace higher. The price on the daily chart rejected a previous area where sellers were active in the market. This could see the price move lower this week only to form a higher low on the daily chart.
The USDJPY fell last week as risk sentiment changed. US data suggested the market is in a recession or heading into a recession as GDP fell for a second quarter. This strengthened the JPY which could continue into this week. If the price was to retest the previous candle lows around 134.50 and price forms a bearish rejection, we could see price continue lower.
The strength meter shows the Euro as the weakest currency and the JPY as the strongest. This could be a chart to watch for further short opportunities. The weekly candle closed bearish and if the price was to retest the recent daily lows, we could look for short opportunities around these areas.
With the poor US data continuing the price of Gold has surged from the lows. The strong bullish weekly close suggests buyers are active in the market. This momentum is likely to continue with the price looking to test the previous support around $1790.00. If the risk in the market remains we could see the price of Gold head towards the other side of the range.
Did you see our Forex Market Wrap analysis? You can see it here.
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