The US Dollar struck a new 2022 high ahead of the Federal Reserve interest rate announcement, with the DXY index hitting 105.78 before trimming gains and finishing lower on the week. Anunpredictable geopolitical landscape, volatility in stock markets, and the threat of continuing inflation have helped the US Dollar’srise over the last several months.
The opportunity for a pullback in geopolitical tensions appears unsustainable at the current moment, given the raging conflict in Ukraine.Ukraine and Moldova recommended for EU candidacy while Georgia requires further reforms. Obvious ‘technical issue’ results in Germany, Italy and France among those receiving less gas than requested from Russia
Next week, Monday starts with limited expected volatility due to US Banks being closed in observance of Juneteenth National Independence Day. The most important economic data releases next week will be as below:
- Early Tuesday Australiawill announce its Monetary Policy Meeting minutes and later Canada Retail Sales.
- On Wednesday the UK and Canadian Consumer Price index will be releases and later the US Federal Reserve Chair Powell will testify.
- Thursday starts with the EU flash Services and Manufacturing PMI’sand later the US Federal Reserve Chair Powell will testify once again.
- A quiet Friday with Australian banks will be closed in observance of Matariki and later the RBA Gov Lowe Speaks.
Major Currencies Performance and Signals
EUR/USD
The euro dropped last week, with most of the losses coming onFriday. The euro was all over the place during the week, which is indicative of the markets in general.We expect the bearish momentum to continue.
FORECAST: SELL
Resistance: 1.0500, 1.0550, 1.0600
Support: 1.0450, 1.0400, 1.0450
GBP/USD
The Bank of England press conference caused chaos, but it does look like we are at least trying to do some type of recovery for a base-building exercise here.We expect the pair to be bearish this week.
FORECAST: SELL
Resistance: 1.2300, 1.2350, 1.2400
Support: 1.2250, 1.2200, 1.2150
AUD/USD
The Australian dollar tried to march last week but gave back the gains as we are getting close to the 0.70 level. This is an area that should be significant support, but if we break through there again, it is likely that we will continue to go lower We are bearish on the pair.
FORECAST: SELL
Resistance:0.7000, 0.7050, 0.7100
Support:0.6950, 0.6900, 0.6859
USD/JPY
The US dollar initially plunged against the Japanese yen during the past week, but as you can see, we have turned around quite drastically to close out the week near the ¥135 level. We continue to be bullish on the pair.
FORECAST: BUY
Resistance: 135.50, 136.00,136.50,
Support: 135.00, 134.50, 134.00
USD/CAD
The Looniehas already breached 1.0375 resistance last week. Oil plunged to $110, down 6% on Friday for the commodity’s sharpest daily loss since March. We are bullish for this week.
FORECAST: BUY
Resistance: 1.3050, 1.3100, 1.3150
Support: 1.30001.2950, 1.2900
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