In this week’s Week Ahead Analysis we take a look at the key charts of the week with #EURUSD, #USDJPY, #GBPUSD and more!
Watch the video to learn more…
Week Ahead Analysis
The volatility in the markets should be high this week as we have announcements from several central banks and members. On Monday the UK will announce Boris Johnson’s successor for Prime Minister. This could cause some volatility to the GBP early this week.
The RBA will then announce a rate hike which sees rates move to 2.35%. The last time the RBA hiked we saw the Australian Dollar fall which could happen again if the announcement is priced in.
Investors’ heads will then turn to the ECB as they look to hike interest rates by 75bps. This announcement does come with a risk that the ECB may hike by 50bps instead, this would be a disappointment to the market and the Euro would likely weaken.
Finally, the Federal Reserve Chairman Jerome Powell is speaking for the first time since the Jackson Hole event where he highlighted the war against inflation. This could see him reiterate the Feds position and the USD could continue to strengthen.
The strength meter this week shows us that the USD and EUR are getting stronger. The CHF reversed from its strength and weakened after reaching the reversal zone. The GBP is currently the weakest currency but in a reversal zone, this could see a reversal form and the GBP could get stronger.
The EURUSD price is consolidating below the monthly value area low. This can often see the price breakout and continue the downward movement. However, the Euro is gaining strength on the strength meter which is why we are seeing this consolidation form. If the ECB doesn’t disappoint in their next meeting a bullish move could occur past 1.0100. However, this is unlikely at the moment as the USD looks to strengthen off the latest Fed announcement. A break below 0.9900 would invite sellers to participate to find lower prices.
The GBPUSD continued the bearish momentum from the following week which could continue in the short term again this week. The price is approaching the key level of 1.1450, this range low could see investors step back in again. If the price can climb back within last week’s value above 1.1550 we could see the price continue higher.
The AUDUSD price could move lower this week as the price trades below the monthly and weekly value area lows. The RBA is forecast to hike rates but in recent history this has been met with selling pressure. The current monthly value area low and weekly point of control sits at 0.6858 and could act as resistance if the price was to reach this level.
The USDJPY price broke through the major highs of 139.40 this week in line with our expectations. The JPY weakness is likely to continue and if the USD strengthens the price could be heading back to the 145.00 resistance. The weekly value area high and the swing highs of 139.40 could act as support this week if we saw the price retest this area.
Did you see our Forex Market Wrap Analysis? You can see it here.
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