In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #GBPUSD, #NZDUSD and more!
Watch the video here…
Week Ahead Analysis
Volatility could be lower in the markets this week as we do not see as much high impact data compared to last week. We do however hear a couple of central bank chairman’s speaking this week, the RBA Gov Lowe speaks ahead of their monetary policy meeting minutes, followed by Federal Reserve Chairman Powell testifying. Inflation data out of the UK and Canada could spark some fresh bids as inflation looks to rise in both areas.
The strength meter highlights the EURO and CAD were the weakest currencies of last week and the AUD and CHF were the strongest. There is no currency in an extreme zone offering reversal opportunities.
Recently the ECB has announced they will begin to hike rates in July’s meeting but since then the currency has devalued on the strength meter. This could be because the ECB has not been as aggressive as other central banks to move rates to control inflation. Looking at the chart this week we saw a sell off after late into Thursday’s close which followed through into Friday. If this momentum were to continue we could expect the price to break through the weekly point of control and currently lows around 1.0440, this could see the price fall to the major lows. If however the price was to find support we could see a move back to the highs around 1.0600.
GBPUSD sold off from the 1.2400 level last week seeing price drop over 200 pips from that level. The price is currently trading at 1.2200 and if the USD was to continue to strengthen we could see a break below this week’s point of control and a move down to the 1.2000. If the risk begins to re-enter the market in the short term and the USD was to weaken instead, we should see a move back towards the low volume at 1.2400.
The NZDUSD price rejected last week’s value area low and retested the previous highs of 0.6300. Again, for this market to move higher we would need to see the risk re-enter the market which is looking unlikely in the current conditions. If it did then we could see a move back to the highs at 0.6400.
The S&P500 gapped lower on the open last week after aggressive selling late into the session. This time we didn’t see the same aggressive selling but with the current risk off conditions we could see the price continue to fall. If however the price was to pullback we could see a move back higher to close the gap.
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