In this week’s Week Ahead Analysis we take a look at the key charts of the week with #GBPUSD, #EURUSD, #NZDUSD and more!
Watch the video to learn more…
Week Ahead Analysis
The RBNZ is forecast to hike rates this week by 75 bps as they look to control the rising inflation rates. Currently interest rates ate at 3.5% and this hike would see it move up to 4.25%. Core CPI Inflation which excludes volatile food and fuel prices has risen to all time highs of 6.2%. This is why the New Zealand Central Bank is more likely to hike aggressively as this figure continues to rise.
Following on from this we have French, German and UK PMI releases with all forecasts to show some level of easing.
Towards the end of the week going into Thanksgiving in the US the FOMC meeting minutes will be released. This could give investors a clue into what is to come in the December meeting although recent data has suggested a slowing of tightening is likely.
The strength meter shows us that the USD remains at the lows at -6 but in a reversal zone. The NZD reached the highs and reversal zone of 5 showing it is the strongest currency. The EUR was the weakest currency of last week which could offer opportunities this week.
The price of EURUSD has rallied due to the weakness of the USD of late and if it were to continue we could expect the price to reach the 1.0500 resistance level. The price was in a strong downward trend working within a bearish channel for a large majority of 2022 until the end of October where the momentum seemed to have shifted. Now price continues to form higher lows we could assume another one could form at previous resistance turned support such as the 1.0100 level. If the price fell to this level and formed bullish price action we could look for buyers to step in here.
The GBPUSD price is trading above the recent resistance levels of 1.1700. This has come after the price continued to make higher lows since forming the major low back in September. The cable price could retest this 1.1700 support this week and if found support we may look to see the price trade up to the 1.2200 resistance. In order to see this we would need the USD to weaken significantly which would happen if the FOMC meeting minutes see the Fed slowing the pace of tightening in the December meeting.
The NZDUSD will be one to watch this week as the RBNZ is forecast to hike rates. Inflation rates are continuing to climb and the New Zealand Central Bank may want to remain aggressive with their stance on monetary policy until inflation rates change. The NZDUSD price is currently moving to the upside and trading out of a bearish channel trendline. As well the price is trading above the 0.6000 handle which could act as support if the price were to test this level and hold going forward.
The EURAUD price was featured in our outlook videos last week as the price looked to be stalling at the major support level. The weekly time frame showed the price forming a Doji candle at the 1.5400 handle suggesting accumulation was occurring around this area. We can also see the price is forming a flag pattern after the market rallied. This could see the price breakout higher if the minor trendline resistance was breached.
Did you see our Forex Market Wrap Analysis? You can see it here.
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