Forex Trading Library

The Week Ahead – Another Backward Step

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AUDUSD inflation rate still poses a threat
Chart indicating AUDUSD's resilience against inflation threats.

The Australian dollar gathered strength after a pop above the latest resistance of 0.6600. The weakness in the greenback is being felt further afield, even if Australia’s GDP data was downbeat. However, the struggle against inflation rate is far from over, with rising price pressures and labour costs. With the RBA interest rate decision not so far away, signs of another rate increase could lead to a significant reversal for the Aussie, with 0.6540 as the first target and 0.6650 as the new resistance.

USDJPY rallies as BoJ remains dovish
Chart showing USDJPY rally amid BoJ dovish stance

The Japanese yen witnessed a dramatic turnaround after the dollar’s weakness across the board. BoJ governor Kazuo Ueda continues to brush aside any talk of changes to the policy as they strive to minimise disruptions to the economy. With GDP data expected to come in hotter than expected, this would add to the rhetoric that any signs of a rate hike are unnecessary. The pair is testing February’s low of 146.00, with 144.70 the closest support.

USDCAD drops to monthly lows
Chart depicting USDCAD's decline to monthly lows.

The Canadian dollar has a week to remember as it gained over 100 pips over the greenback. The BoC stated that no further rate increases would be needed if data aligns with expectations. With the balance of trade finally back in positive territory and upbeat employment, the chance is that the rally will continue. The greenback’s pullback opened last month’s lows towards 1.3360, with 1.3430 being the first support.

SPX 500 steadies as another record is in sight
Chart illustrating SPX 500's steadiness amidst record highs anticipation.

The S&P 500 took a breather from setting another record high as earnings season winds down. With Goldman Sachs and Bank of America raising their forecasts for 2024 for the index, the likelihood is that price action will push higher again. However, mixed nonfarm payroll numbers could pause sentiment, representing a significant downside risk for equities. The index steadily remained at around 5100, with a limit of 5350 in the near term.

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