In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #GBPUSD, #USDJPY and more!
Watch the video to learn more…
Week Ahead Analysis
This week sees a return to the high impact news with the week starting with PMI data out of Europe, UK and US. This will add volatility to the beginning of the week which could see the USD recover some of its losses it had at the end of last week. Following on from this we have CPI data out of Australia which is forecast to come in lower than previous at 1.6%.
In central bank news we see rate announcements from the Bank of Canada, European Central Bank and Bank of Japan. The Bank of Canada will go first with an expected hike of 50bps seeing rates move to 3.75%. Investors will then turn their attention to the ECB who are forecast to hike rates by 75bps with a rate move to 2.00%. This would be a hawkish move by the ECB and if they highlight further moves to come we could see the EURO extend its recent strength. The BoJ are also set to release their monetary policy statement and despite the recent intervention the central bank will unlikely shift in moving rates.
The strength meter this week shows some significant changes. The GBP turned a corner at the end of the week and strengthened, becoming the strongest currency of the week. The CHF and JPY were the weakest currencies of last week and are both in reversal zones.
The price of EURUSD rallied towards the end of the week highlighting a potential for the price to continue in that direction. Volatility is expected to rise this week which could see the price turn lower again at this resistance of 0.9850. However, if the price trades above this level we could see a move towards the 0.9900 level of even parity.
The GBP turned from being the weakest currency to the strongest currency at the end of the week with the price of cable trading back above the 1.1200 level. This could see the price move back towards the key monthly support at 1.1400. If the price trades above 1.1400 the next resistance level is 1.1600.
The USDJPY price fell over 500 pips on Friday after the price formed new highs around 151.50. The Bank of Japan has failed to talk of intervention and said even if they had intervened they wouldn’t say anything. It is safe to assume that they have due to the reaction in price. This intervention could see the price move back to 145.00. However, if this is treated the same as the previous intervention then the price could retest the level where the intervention stepped in.
The NZDUSD price was one to watch last week as the strength meter highlighted this pair for a continuation or reversal. The price reversed seeing a break back above the previous 4hr highs. If the price were to continue to move higher and break above 0.5800 we could look for a larger move and for the price to test 0.6000.
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