In this week’s Week Ahead Analysis we take a look at the key charts of the week with EURUSD, AUDUSD, USDCAD and more!
Watch the video to learn more…
Week Ahead Analysis Video
This week kicks off with some inflation data out of Switzerland, this could be significant due to the recent interest rate decision from the Swiss National Bank. They raised interest rates for the first time since 2007 stating global inflation was the reason behind the decisions. If the CPI figures come in over the forecasts of 0.3% we could see the CHF remain strong in the market. If it falls we could see the opposite effect take over.
The RBA are forecast to hike rates again in this upcoming meeting which could see the AUD strengthen in the short term.
In other data we have the FOMC meeting minutes which could highlight what is next for the Federal Reserve in terms of rates, we also have NFP data which is forecast to show a creation of 200k+ in the month of June.
The strength meter this week highlights the Canadian Dollar was the largest gainer over last week which could follow through this week. The Swiss Franc remains the highest on the strength meter but in a reversal zone which the CPI data will likely affect. The New Zealand Dollar remained at the bottom of the meter as the weakest currency but also in a reversal zone.
The EURUSD price has retested the major swing lows that formed last month, the price tested the area twice last week and found buyers both times. However, if the USD was to strengthen further this week we could see the price break these lows and drive lower. Early stages of the week could see a retracement which often forms after large downside movements. If a retracement is likely we could see the price bounce from these levels and move back to the value area low of last week around 1.0454 or the recent highs around 1.0480. If the price remains below these levels we could see an extension lower.
The RBA hiking interest rates could see the price of the AUDUSD bounce in the short term. Last week we saw the price break through the key lows and drive towards a previous turning point which formed a while back. The lower low and lower high pattern suggest sellers are happy to sell the price as it rallies. If the price was to move higher this week we could see a test of the value area low or even the previous highs where the selling pressure started from. This could be in line with the current moves forming on the US Stock markets. If the US Stocks climb we often see the AUDUSD price climb as the risk outlook looks more positive and risk currencies benefit.
This analysis follows on from our previous USDCAD analysis last week, the Canadian Dollar on the strength meter has been performing well. When looking at the USDCAD price we saw it trading within a diagonal range, this range could play out if the Canadian Dollar can remain strong. The 1hr chart shows the price rejecting a major area of resistance and if the price was to retest the recent level where sellers entered the market we could see a similar pattern form. The price is currently heading towards a trendline support and could see a short term bounce form from here.
The US Stock market fell last week after closing a previous gap in the market. The double top pattern that had formed shows the price failing to make new highs. In this case the price then moved significantly lower showing that sellers were active at these levels. If the price was to reach this area again and form bearish price action we could see the same action form again.
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