Last week, the FX market saw some big price movements over the past week, with the US Dollar rising sharply as a haven and on bouncing back yields. The Euro, British Pound, and Swiss Franc dropped in considerable value, partially due to the impact of the war in Ukraine and to the deteriorating economic data.
Brent crude oil prices soared to more than 2% until Friday as the energy markets were rocked that European regulators embraced a previously rejected move to cut off Russian oil exports. The German Economy Minister Robert Habeck, on Thursday, said “We have made a lot of progress on oil and could join an embargo if it happened.” That change of heart was viewed by the market as a green card for the 26-member bloc to move ahead on an embargo, even though a concrete plan has not yet been announced.
Commodity markets are not as buoyant as they were a few weeks ago, but we still see some agricultural commodities such as Cotton and Corn continuing to advance to new long-term high prices.
The coming week in the markets is likely to be more volatile as there are several data releases of high importance scheduled. They are, in order of likely importance:
- On Monday UK and Chinese banks will be closed in observance of May Day and Labor day respectively. Japanese markets will be closed from Monday until Thursday due to holidays. The US ISM Manufacturing PMI data will be released during the day.
- Tuesday the RBA Cash Rate and Rate Statement is scheduled to be released as the market is expecting a rate hike of 0.15% and later the US JOLTS Job Openings.
- Wednesday start with New Zealand unemployment. Later in the day the FOMC Federal Funds Rate and Statement – the market is expecting a rate hike of 0.50%, and a surprise there is very improbable.
- Thursday: Bank of England Official Bank Rate – the market is expecting a rate hike of 0.25%.
- Friday: US Non-Farm Employment Change and Canadian Unemployment
- Tuesday: US JOLTS Job Openings
Major Currencies Performance and Signals
EUR/USDThe EURUSD pair has declined sharply by 2.3% due to the continued Russia-Ukraine conflict. We remain bearish again this week.
FORECAST: SELL
Resistance: 1.0550, 1.0600, 1.0650
Support: 1.0500, 1.0450, 1.0400
GBP/USD
The British Pound posts heavy losses against the US dollar during the week, falling to its weakest level as well. We expect the British pound to rebound next week.
FORECAST: SELL
Resistance: 1.2600, 1.2650, 1.2700
Support: 1.2550, 1.2500, 1.2450
AUD/USD
Aussie also got hurt by heavy losses and it is expected to continue this week but with an ey of the Friday’s US NFP Unemployment report.
FORECAST: SELL
Resistance: 0.7100, 0.7150, 0.7200
Support: 0.7050, 0.7000, 0.6950
USD/JPY
The USD/JPY pair recorded another high further 131.25 as this week is expected to not have a lot of volatility due to Japanese holidays. We expect this trend to continue.
FORECAST: BUY
Resistance: 129.00. 129.50, 130.00
Support: 128.50, 128.00, 127.50
USD/CAD
The Loonie has risen last week as well, and we expect the bullish trend to continue. Investors will be watching closely the Fridays US NFP and Canadas Unemployment report.
FORECAST: BUY
Resistance: 1.2900, 1.2950, 1.3000
Support: 1.2850, 1.2800, 1.2750
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