In this week’s Week Ahead Analysis we take a look at the key charts of the week with AUDUSD, GBPUSD, AUDJPY and more!
Watch the video to learn more…
Week Ahead Analysis
Investors will be watching the US Inflation data towards the end of the week closely to see if the inflation rate is easing. The stock markets remained balanced last week and we will be watching to see if the price heads lower or higher towards the day of the data. If inflation doesn’t seem to be easing we could see the stock markets begin to break lower again as this would leave the Federal Reserve little choice than to hike rates aggressively.
In other news this week the RBA is forecast to hike interest rates from 0.35% to 0.75% with the central bank likely to remain aggressive in a similar path to most other central banks. The ECB is also set to announce rates this week but forecasts suggest a hold at 0.00% however recent speeches could suggest a hike may be seen earlier.
The strength meter this week highlights the EURO is the strongest currency and the GBP is the weakest. The USD has dropped significantly lower but this could change on the inflation data. The AUD has reversed as pointed out in last week’s analysis and could continue if the RBA remains hawkish. This all could depend on how the S&P500 performs this week, if the stock market begins to break lower we could see a risk off environment build.
This week AUDUSD could be one to watch for an early rally if the price remains within its current upward trend. The RBA hiking rates could see the price retest the point of control last week, if this is respected we could see a rally back to the highs or the key volume levels around 0.7300.
If however the price breaks back below the key point of control last week we could see the price head towards the untested point of control below around the key 0.7100 zone.
The GBPUSD closed bearish at the end of the week after feeling the effects of the fluctuating USD. The price is currently outside of last week’s value which could suggest more downside is to come if the pair rejects the value area low and point of control once again. A break of the lows around 1.2450 would be a further bearish signal for the currency pair. If however, the price does hold back within value we could see a move back to the key low volume highs at 1.2660.
The AUDJPY price could be one to watch this week if the Australian Dollar can continue to strengthen. The price recently broke out of a downward trend seeing high volume pushing the price over 300 pips last week. The price is currently outside of last week’s value area and if the price was to retest and find support at the zone around 93.40 we could expect a move higher once again. This will all depend on the risk appetite in the market and if the stock markets remain bullish, if we see a downward turn then the price could move back towards the 91.00 area.
The stock markets will be watched closely by investors this week as the inflation data looks to add volatility. The price of the S&P500 remained balanced last week which can see the price break out of the week after. If the inflation data shows signs of easing this could be a positive for the stock market and we could see a break higher. Increasing inflation would have a negative effect and we could see the price trade back to the recent swing lows.
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