Last week, the US dollar has weakened giving chance to the other USD currency pairs like the EUR, GBP, and AUD to rebound. Despite the pullback at the end of the week, the S&P 500 Index and Dow Jones Industrial Average posted their biggest weekly gain in a month, while the Nasdaq notched its largest advance since July 8.
There will be a meeting of the Federal Open Market Committee of the US Fed next week, on Wednesday, July 27. Almost expects that the key interest rate will be raised there. If the FOMC chooses the first option, the rate will reach 2.75%. It is this growth that the markets put into their quotes, expecting a new assault on the 1.0000 horizon by the EURUSD pair. However, if the Fed abandons this idea and the rise is more modest, then a further rebound of the pair to the north is not ruled out.
Next week, traders will focus on the Wednesdays FOMC rate decisions. The most important economic data for next week will be as follows:
- A quiet Monday this week with only the German ifo Business Climate will be released
- Tuesday the US CB Consumer Confidence and Richmond Manufacturing Index will be out.
- Early Wednesday the Australian quarterly CPI will be released but at the end of the day the US FOMC decisions will be announced
- Thursday the Advanced GDP will be released which will be the first GDP number for the quarter
On Friday, the monthly US Core PCE Price Index and Revised UoM Consumer Sentiment
Major Currencies Performance and Signals
EUR/USD
The euro rallied rather significantly last week, so it does suggest that we may have a little bit of recovery ahead of us. All eyes on the FOMC decisions next week but we remain bearish on the pair.
FORECAST: SELL
Resistance: 1.0250, 1.0300, 1.0350
Support: 1.0200, 1.0150, 0.0100
GBP/USD
The British pound rallied last week to reach above the 1.20 level, showing signs of recovery. All eyes on the FOMC decisions next week but we remain bearish on the pair.
FORECAST: SELL
Resistance: 1.2050, 1.2100, 1.2150
Support: 1.1950, 1.1900, 1.1850
AUD/USD
The Australian dollar broke higher last week as it looks like we are testing the 0.70 level. The price 0.70 level will entice a lot of attention, so traders will be watching for signs of fatigue to start shorting. All eyes on the FOMC decisions next week but we remain neutral on the pair.
FORECAST: NEUTRAL
Resistance: 0.7000, 0.7050, 0.7100
Support: 0.6950, 0.6900, 0.6850
USD/JPY
The US dollar pulled back considerably against the Japanese yen, as we are pulling back from a major overbought area. The 136 level is an area that could offer a little bit of support, but after that, we could drop to the 135 level quite quickly.
FORECAST: NEUTRAL
Resistance: 135.00, 135.50, 136.00,
Support: 134.50, 134.00, 133.50
USD/CAD
The Canadian dollar is trading close to its peak for the week despite soft oil prices and renewed US dollar demand against the majors. All eyes on the FOMC decisions next week but we remain neutral on the pair.
FORECAST: NEUTRAL
Resistance: 1.2950, 1.3000, 1.3050
Support: 1.3000 1.2950, 1.2900
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