Last week’s financial markets were relatively quiet, although more active than the previous week. This is due to that we are well into the summer season in the northern hemisphere when global markets tend to get on slower.
The main headlines last week were the possible economic effects of the rising Covid-19 globally driven by the delta variant, and the US Federal Reserve’s monthly policy release which gave a very small dovish angle to its monetary policy. The Fed’s announcement pushed the US Dollar into selling status, and it spent most of the rest of the week selling off, although not especially strong. US advance GDP data also came in considerably lower than expected, but this seemed to have little effect in the markets.
Next week will bring a similarly busy data schedule, notably US non-farm payrolls data and the Bank of England’s monthly policy release, as well as the RBA rate statement plus New Zealand employment data. The Forex market is therefore likely to show a similar level of activity next week.
The most important economic data next week will be:
Monday starts with the Australian and Canadian Banks will be closed in observance of the Bank Holiday and Civic Day respectively. The EU and German Final Manufacturing PMI will be released throughout the morning and later in the day the US Manufacturing PMI will be released as well.
On Tuesday, the Australian RBA Rate Statement and Cash rate will be announced. Later in the morning the Spanish Unemployment Change will be announced.
Wednesday starts with the New Zealand’s quarterly Employment Change and the monthly Australian Retail Sales. Later the US ADP Non-Farm Employment Change and ISM Services PMI will be released. Finally at the end of the day the Crude Oil Inventories will be announced.
On Thursday the UK will release several monetary policy figures and reports by the Central Bank. Later in the day the US Unemployment Claims figures will be released.
Friday, investors will be waiting for the release of the most important numbers of the month the NFP Employment Change and Unemployment Rate.
Major Currencies Performance and Signals
EUR/USD
The euro rallied during last week, breaking above the 1.1850 level due to the USD dollar weakness. For this week we have a neutral outlook on the EURUSD pair.
FORECAST: NEUTRAL
Resistance: 1.1900, 1.1950, 1.2000
Support: 1.1850, 1.1800, 1.1750
GBP/USD
The same pattern as the EURUSD. The Bank of England is having a monetary policy meeting this week. The UK coronavirus situation continues to improve, underpinning the pound.
FORECAST: NEUTRAL
Resistance: 1.3900, 1.3950, 1.4000
Support: 1.3850, 1.3800, 1.3750
AUD/USD
Last week the Aussie has recovered a bit due to the US dollar weakness but is still in a bearish trend. We expect the AUDUSD pair to go lower.
FORECAST: SELL
Resistance: 0.7400, 0.7450, 0.7500,
Support: 0.7300, 0.7250, 0.7200
USD/JPY
Last week the pair moved lower going under the moving averages giving the pair a bearish momentum. We expect the trend to continue but with a careful eye to the upcoming NFP figures on Friday.
FORECAST: SELL
Resistance: 110.00, 110.50, 111.00
Support: 109.50, 109.00, 108.50
USD/CAD
Last week the Loonie pair moved lower going under the moving averages giving the pair a bearish momentum after the US Dollar weakness due to the Fed. We expect this week for the USDCAD pair to range between the 1.2500 and 1.2600 channel.
FORECAST: NEUTRAL
Resistance: 1.2500, 1.2550, 1.2600
Support: 1.2600, 1.2550, 1.2500
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