In the last week, a weaker than expected US non-farm payrolls report sent Treasury yields and the US Dollar lower. It was a generally quiet week in the Forex market in terms of volatility with the strongest rise in the value of the Australian dollar and the sharpest fall in the relative value of the New Zealand dollar. The Canadian dollar and the British pound have the greatest long-term trend strength among major currencies.
The major events this coming week will be major monthly policy inputs from the European Central Bank (Thursday) and the Bank of Canada (Wednesday). Also, Crude Oil Inventories will be reported on Wednesday and key U.S. CPI inflation data will be released on Thursday. On Friday, the US will report their Prelim UoM Consumer Sentiment data.
On Monday, New Zealand banks will be closed in observance of the Queen’s Birthday.
The above releases are likely to guarantee that the coming week is more volatile than last week was.
Major Currencies Performance and Signals
EUR/USD
The euro has been ranging during the week but has stayed on a neutral candlestick. The reason for this is that the market is showing a bit of hesitancy for the third week in a row, and I think at this point there might be a real threat of the pair going down.
FORECAST: SELL
Resistance: 1.2200, 1.2250, 1.2300
Support: 1.2150, 1.2100, 1.2050
GBP/USD
The British pound swung against the US dollar throughout last week as it continues to battle at the 1.42 price level. This is a price that has a lot of resistance to break, and I do not see a major change in attitudes over the next week or so.
FORECAST: NEUTRAL
Resistance: 1.4200, 1.4250, 1.4300
Support: 1.4150, 1.4100, 1.4050
AUD/USD
Last week, the Aussie finished the week with a bearish trend after a ranging neutral session. We expect that next week the AUDUSD will carry on the bearish trend downwards with an eye at the US NFP on Friday.
FORECAST: BUY
Resistance: 0.7750, 0.7800, 0.7850,
Support: 0.7700, 0.7650, 0.7600
USD/JPY
The US dollar initially tried to make a comeback during the week only to turn around and fall against the Japanese yen. Now that we have formed a shooting star, this suggests that perhaps we are going to continue to see some consolidation underneath current levels, perhaps focusing on the ¥109 level yet again.
FORECAST: BUY
Resistance: 110.00, 110.50, 111.00
Support: 109.50, 109.00, 108.50
USD/CAD
We have seen a firm and persistent long-term bullish trend in the Loonie ever since the preliminary recovery from the covid-19 price shock of March 2020. Despite the solid long-term bearish trend, bears should be cautious of the big round number at 1.2000, which was almost touched last week and could be a strong support.
FORECAST: SELL
Resistance: 1.2100, 1.2150, 1.2200
Support: 1.2050, 1.2000, 1.1950
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