In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #AUDUSD, #GBPJPY and more!
Watch the video to learn more…
Week Ahead Analysis: 30th January
This week, financial markets will be focused on the latest central bank rate decisions from the UK, Europe, and the US. All three central banks are expected to raise interest rates, with the ECB expected to be the most aggressive, potentially hiking rates by 50 bps. On the other hand, the Federal Reserve is expected to raise rates by 25 bps, with no indication of further rate hikes beyond this level as they aim for a 5% interest rate.
Towards the end of the week, attention will shift to the latest Non-Farm Payroll data, which is expected to show a decline in jobs created and an increase in the Unemployment rate. This will provide a snapshot of the current state of the US labor market and could have implications for future monetary policy decisions.
For currency traders, the strength meter continues to indicate that the JPY is losing strength while the GBP is gaining strength, making GBPJPY the currency pair to watch. These trends will be closely watched by those looking to take advantage of the currency market volatility.
EURUSD continues to trade higher despite the price reaching the key resistance of 1.0925. This level matches the level of support on the USD Index where we could expect the basket of currencies against the USD to move higher from. If that was to occur we would expect to see the EURUSD price trade through the current bullish channel that has formed on the H4 chart. With high volatility news this week we could expect the market to favour the USD and a break below 1.0850 could lead to a move down to the lows of 1.0775.
AUDUSD remains bullish after the AUD Consumer Price Index (CPI) came in higher than expected. The RBA will have to act on this as they want to see inflation rates move lower. This has helped the AUD to remain strong, the price of AUDUSD is trading below the key 0.7100 handle, if the price trades through this it could lead to a move towards 0.7275.
GBPJPY is still the chart to watch from the strength meter, the Japanese Yen (JPY) is decreasing in strength and the GBP is gaining strength. Currently the price is consolidating below a major resistance of 161.50. The strength meter is suggesting the market will trade through these highs, we however, will need to wait for a confirmation break in order to identify long opportunities to the lows of 165.00.
USDJPY will be an interesting market to watch this week, the high volatility suggests we could see the USD strengthen as well as the fact, the USD Index is at a key support level. The Japanese Yen (JPY) is getting weaker which could lead to the price trading through the bearish channel and the resistance of 131.50.
In conclusion, this week promises to be a busy one, with important rate decisions and economic data releases expected to drive market sentiment and influence investment decisions. Stay tuned for updates and market reactions as the week unfolds.
Have you watched our Forex Market Wrap analysis? You can see it here.
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