Last week’s market saw the strongest increase in the value of the Australian dollar and the strongest fall in the value of the US dollar. Traders are seeing a long-term trend in the US dollar, which is making the market interesting to trade. Last week was uncommonly calm in terms of high impact news, with very few major economic data releases or political developments to affect prices. There wasn’t much on the progress of the development of a new U.S. economic stimulus package, with impeachment trial and subsequent acquittal of ex-President Trump dominating the headlines, but to no effect on the market.
The largest news apart from surging stock markets was continuing enthusiasm in cryptocurrencies, with Bitcoin continuing to break to new all-time highs. The price has traded above $49,000 per coin over the last few hours.
Overall, next week’s price movement in the US dollar is expected to be driven downwards. For this reason, it will probably be wise to only trade the USD short over the coming week.
On Monday, US banks will be closed in observance of Presidents’ Day. Monday, Tuesday, and Wednesday Chinese banks will be closed in observance of the Spring Festival.
The biggest economic announcements this week will start on Thursday with the UK yearly CPI, the Canadian monthly CPI, the US monthly Retail Sales and at the end of the day the US FOMC Meeting Minutes. On Friday, investors will be looking at the Australia Employment Change then the US Philly Fed Manufacturing Index and Unemployment Claims and on the afternoon session the Crude Oil Inventories.
Past week performance and signals:
Pairs in Focus:
EUR/USD
Last week, the pair has been ranging as expected but closed on the upside. Due to USD weakness, we think that the strategy would be to buy the dips fo, as it goes with a bullish longer-term trend. However, it is very difficult to imagine that the market is simply going to break through the 1.2300 level easily.
FORECAST: LONG
Resistance: 1.2150, 1.2200, 1.2230
Support: 1.2100, 1.2050, 1.2000
AUD/USD
The AUDUSD pair opens today’s trading with bullish bias to move away from the breached resistance that appears on the chart, to support the continuation of our bullish overview, and the way is open to test 0.7820 that represents our next target,
FORECAST: LONG
Resistance: 0.7800, 0.7850, 0.7900
Support: 0.7750, 0.7700, 0.7650
USD/CAD
Last week, the USDCAD pair touches three-week low at 1.2660 on Thursday and 1.2676 on Friday. This week we expect a weak US dollar and looking ahead to Wednesday January’s US Retail Sales will set the stage for first quarter consumption. After three negative months in a row, the forecast modest rise is essential for greenback improvement.
FORECAST: SELL
Resistance: 1.2700, 1.2750, 1.2800
Support: 1.2600, 1.2550, 1.2500
GBP/USD
The neutral stance of the Bank of England, falling coronavirus cases and a rapid increase in the rate of local vaccinations may open the door for the British Pound to continue gaining ground against its major counterparts in the short term.
FORECAST: LONG
Resistance: 1.3900, 1.3950, 1.4000
Support: 1.3800, 1.3750, 1.3700
USD/JPY
The USDJPY pair stays firmer around 105.00, currently near an intraday high of 105.08, following the release of Japan’s fourth-quarter (Q4) GDP data during Monday’s Asian session
FORECAST: SHORT
Resistance: 105.50, 106.00, 106.50
Support: 105.00, 104.50, 104.00
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