In this week’s Week Ahead Analysis we take a look at the key charts of the week with EURUSD, GBPJPY, NZDUSD and more!
Watch the video to learn more…
Week Ahead Analysis
Speeches from the ECB, BoE and FED will be the one to watch this week with all speeches from the central bank leaders happening on Wednesday at the same time. This could create some volatility in the market at this point and typically, when volatility rises we can see a decrease in risk. These central bank speeches could highlight up and coming rate rises and other economic outlooks.
The strength meter this week highlights two currencies at major reversal zones, the NZD is the weakest currency at the moment but in a reversal zone which means we could see some strength re-enter the market. The CHF is on the other side of the meter as the strongest currency but in the reversal zone and we could see some weakness enter this market.
The price of EURUSD stayed within a 200 pip range last week highlighting the lack of direction in the market. When the price moves like this we can often see a breakout in either direction usually driven by a fundamental catalyst. We have many central bank speeches this week which could drive volatility higher, decreasing risk in the market adding strength to the haven currencies like USD and JPY. This could see the price break lower and a move back to the major lows.
The NZDUSD price could continue lower this week in line with the strength meter outlook, the strength meter shows the NZD as the weakest currency but in a reversal zone. The price action last week showed the price rejecting an area where sellers were strong in the past. This suggests sellers were happy to defend higher prices and if this was to continue we could see further rejections. The price closed at an area where the price sold off before, this could act as resistance and we could see a move back to the lows.
The USDCAD price has recently declined from a channel high and could see the price move to the other side of the channel. In a recent video we highlighted the potential for the market to reverse at these highs, now the price is forming the rejection and sellers are active. We could look for further opportunities down to the previous low. Recent data out of Canada is strong and this could help the CAD remain strong.
The GBPJPY price rejected the key highs and has formed a break in trend on the 4hr time frame. If the risk continues to decrease in the market we could assume the JPY could strengthen in the short term which could see GBPJPY move towards the key lows around 162.50. Selling pressure came from the 167.00 level and if the price was to retest this zone we could see sellers re enter the market here.
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