22 Aug

Forex Weekly Technical Outlook on 22-26 August 2016

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Forex Weekly Technical Forecast

This Week’s Pairs: EURUSD, GBPUSD, AUDUSD, & USDJPY
 
EURUSD
 
EURUSD had a good week, rising on the rear of USD weakness. More rises on the way, this week features PMIs & one more important German survey. According to ZEW, economic sentiment has developed, but still finely balanced, with Brexit shocks remain lurking. In the US, the Fed’s minutes showed that only a few minorities wants a hike, although the vast majority wants to hold. This resulted in another round of dollar weakness, extending earlier losses.
 
Euro-dollar made a clear crack over the 1.1230 line discussed previous week and sustained higher. In the awful contest between the greenback & the euro, now the euro had the upper hand. The gains might be consolidated currently. EURUSD remains Neutral.
 
GBPUSD
 
GBPUSD posted razor sharp gains previous week, advancing 160 points. The pair clogged at 1.3069 levels. This week’s major event is Second Estimate GDP. The pound was buoyed by notably solid British figures in July. CPI, employment and retail sales all taken out their forecasts, despite bound less fears of a post-Brexit crash. In the US, the Fed’s minutes showed that only a few minorities favors a rate hike, although the vast majority wants to hold, surprisingly because of low inflation levels.
 
The pair unlocked the week at 1.2908 levels & suddenly reached a low of 1.2865 levels. After that reversing their directions & mounting to a high of 1.3185 levels, testing the resistance levels at 1.3149 mentioned last week. GBPUSD back down late in the week, blocking the week at 1.3069 levels. Despite some solid data earlier week, the UK economy has likely taken a blow from Brexit and will be troubled to sustain churning out positive figures. In the US, a few recent weak data, a December rate hike still wait & see, so any solid figures will boost the odds of rate hike and might force the dollar much higher. GBPUSD remains Bearish.
 
AUDUSD
 
AUDUSD was almost unmoved for three week in a row, as the pair ended at 0.7623. This week has only two events. In the US, the Fed’s minutes hinted that only a few minorities favors a rate hike, although the vast majority wants to hold, notably for the reason of low inflation levels. Australian July employment figures were sharp, as Employment Change and the unemployment rate taken out the expectations.
 
AUDUSD unlocked the week at 0.7654 and rapidly mounted to a high of 0.7749 levels. The pair then changing directions and fell to a low of 0.7598 levels late in the week, as support held tough at 0.7797 levels mentioned previous week. The pair ended the week at 0.7623 levels. The RBA has been hinting that it might lower rates repeatedly, but last week’s solid employment figures might give the bank some breathing space. AUDUSD remains Bearish.
 
USDJPY
 
The Japanese yen placed weekly gains for 4 weeks in a row, as the pair ended slightly over the 100 level. This week’s significant event is Tokyo Core CPI. Safe-haven flows sustain to buy the yen, which bounce off a weak Japanese Preliminary GDP reading of 0.0 percent, short of forecasts. In the US, the Fed’s minutes showed that only a few minorities favors a rate hike, although the vast majority wants to sustain to hold, notably for the reason of low inflation levels.
 
The pair unlocked the week at 101.25 & rapidly reached a high of 101.45 levels, as resistance held at 101.51. The pair after that changing directions and fell to a low of 99.45 levels. USDJPY ended the week at 100.13 levels. The yen might constant to post gains & smash under the100 levels if the markets place feels that the BoJ will not adopt additional easing. At the mean time, while the Fed is very unlikely to raise rates in coming September, there is a fair chance of a December move. This means that any solid US publishes will raise speculation regarding a hike and might send the greenback to upper levels. USDJPY remains NEUTRAL.
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