In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #NZDUSD, #EURAUD and more!
Watch the video to learn more…
Week Ahead Analysis
The volatility of the market could increase substantially this week as we see many high impact news events announced this week. The RBA is set to announce a rate hike this week from 0.1% to 0.25% in their first hike this year. The Australian Dollar has turned negative recently and could continue unless the RBA has future plans to hike rates further.
The big data for the week is on Wednesday as the Federal Reserve is set to announce a rate hike by 50bps. This could see the sentiment of the USD changed slightly as we usually see the USD rally towards the event and weaken after. If this happens this week we could see reversal opportunities form around the major USD pairs. The data doesn’t stop there for the USD as Non-Farm Payroll is announced at the end of the week with forecasts suggesting jobs to come in over 300k once again.
The Bank of England is then also set to announce a rate hike this week with the forecasts showing a 25bps increase. The BoE Governor Bailey last week said that the central bank will slow down the rate at which they hike rates as recession fears grow. This has dampened the GBP seasonal bullishness with the currency weakening significantly over the past few weeks.
The strength meter shows that the AUD and NZD are the weakest currencies currently with the USD. EUR and JPY are gaining strength. If the volatility remains high this week we could see haven currencies like the USD and JPY stay strong.
The price of EURUSD could swing this week depending on the outcome of the FOMC data on Wednesday. The price is currently bearish as the USD has gained significant strength, but if the narrative for the USD changes or the announcement is priced in we could see a reversal opportunity form and the price could move back to the previous weekly lows.
The NZDUSD weekly chart shows how weak the New Zealand Dollar has been with the price of NZDUSD breaking through major key lows. The NZDUSD may not be the ideal pair to trade the weakness of the kiwi on this week but it shows that we could look for opportunities against stronger currencies with less high impact news events.
The price of EURAUD looks to be in a retracement phase after a large impulsive move to break through key support zones. If the price of the pair continues to retrace, the 4hr time frame should continue to make an uptrend. The 4hr time frame shows that the price has found support and broke through key resistance levels, if the price forms a higher low herer we can look for trend opportunities.
The price of Gold could be one to watch going into this week as the FOMC are set to announce a rate hike. The price of Gold has fallen recently as the Federal Reserve announced they will hike rates in this May meeting. If the move is priced in we could see the price of Gold move back to the upside and if the price can remain above last week’s low we could look for long ideas.
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