USD/JPY Weekly Forecast (14th March 2022 – 18th March 2022)

Fundamental view:

The yen pair climbed up and reached a high of 2022 – 116.35 which is also a four year top. The Ukraine crisis, US and Japan Bank Meeting are the major catalysts in driving the pair’s move. Market sentiment was down for most of the week but improved at the weekend on Friday with Russian President Vladimir Putin’s comment that there were “certain positive developments” in talks with Ukraine that undermined the yen safety trade.

The Fed has promised a 0.25% hike on March 16. Treasury futures have the odds at 95.9%. Markets are undecided whether the governors will initiate a reduction of the bank’s $9 trillion balance sheet. Whereas on the other hand, the  Bank of Japan is expected to maintain its -0.1% main rate at its meeting on Friday. 

In this week, Japan Adjusted Current Account on 7th March and US JOLTS Job Openings on 9th March favored bullish trend whereas Japan Household Spending yearly report on 10th March and Michigan Consumer Sentiment on 11th March favored bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are NY Fed Empire State Manufacturing Index at Mar 15, Japan Industrial Production monthly report, US Retail Sales monthly report, Fed Interest Rate Decision at Mar 16, Initial Jobless Claims, US Fed Industrial Production yearly report at Mar 17, BoJ Interest Rate Decision and Fed Governor Bowman Speech at Mar 18.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 1.34% higher than the previous week. Maintaining high at 117.35 and low at 114.81 showed a movement of 254 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 118.14 may open a clean path towards 119.01 and may take a way up to 120.68. Should 115.60 prove to be unreliable support, the USDJPY may sink downwards 113.93 and 113.06 respectively. In H4 chart, Formation of double bottom pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish engulfing formation braces our expectation.

Preference
Buy: 117.25 target at 119.31 and stop loss at 115.55

 

Alternate Scenario
Sell: 115.55 target at 113.07 and stop loss at 117.25

GBP/USD Weekly Forecast (14th March 2022 – 18th March 2022)

Fundamental view:

Pound dropped against the US dollar during the trading course of the week. Risk-off wave dominated the week, as Market flocked towards the safe haven US dollar and gold  and dumped the higher-yielding currencies such as the pound. The West continued to pressure Russia by threatening to increase economic warfare. Market stayed under pressure most of the week, However, it got a positive turn on Friday after Russian President Vladimir Putin said that “there were certain positive shifts” in negotiations with Ukraine. Whereas President Volodymyr Zelenskyy said that it would take time and patience to achieve victory.  

The BOE is under focus on the upcoming week. BOE is expected to lift policy rates amid soaring inflation. Market keeps a hawkish outlook from the BOE as the ECB signaled faster tapering at its March 10 policy decision, despite of Ukrainian crisis. On the other hand, The Fed is expected to raise interest rates for the first time since 2018, and policymakers will likely hint at a faster pace of hikes in 2022.

In this week, UK RICS House Price Balance on 10th March and Michigan Consumer Sentiment on 11th March favored bullish trend whereas UK Halifax HPI monthly report on 7th March and US JOLTS Job Openings on 9th March favored bearish for the pair.

The major economic events deciding the movement of the pair in the next week are UK Claimant Count Change, NY Fed Empire State Manufacturing Index at Mar 15, US Retail Sales monthly report, Fed Interest Rate Decision at Mar 16, BoE Interest Rate Decision, Initial Jobless Claims, US Fed Industrial Production yearly report at Mar 17 and Fed Governor Bowman Speech at Mar 18.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 1.44% lower than the previous week. Maintaining high at 1.3243 and low at 1.3027 showed a movement of 216 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 1.2958 proves to be unreliable support then the pair may fall further to 1.2884 and 1.2742 respectively whereas a solid breakout above 1.3174 will open a clear path upward to 1.3316 and then will further raise up to 1.3390. Chart formation of symmetrical triangle breakout downside in H4 chart favors prospects of a bearish trend. Bearish engulfing pattern formation escalates the expectation for a bearish trend.

Preference
Sell: 1.3031 target at 1.2822 and stop loss at 1.3179

 

Alternate Scenario
Buy: 1.3179 target at 1.3389 and stop loss at 1.3031

EUR/USD Weekly Forecast (14th March 2022 – 18th March 2022)

Fundamental view:

Euro plummeted against the greenback during this week due to the risk sentiment amidst Ukraine crisis.

Concerns over Russia – Ukraine tussle eased temporarily during mid week as Kyiv put a diplomatic solution on the table, but of no use. Market stayed under pressure most of the week, However, it got a positive turn on Friday after Russian President Vladimir Putin said that “there were certain positive shifts” in negotiations with Ukraine. Whereas President Volodymyr Zelenskyy said that it would take time and patience to achieve victory.  

The ECB meet the expectation by keeping the interest rates unchanged, However the central bank announced it would end the Asset Purchase Program in the third quarter of the year, sooner than anticipated. On the other hand, The Consumer Price Index of US soared to 7.9% YoY as expected, but still a multi-decade high and The central bank is expected to raise interest rates for the first time since 2018, and policymakers will likely hint at a faster pace of hikes in 2022.

In this week, Eurozone Retail sales monthly report on 7th March and US initial Jobless claim on 10th March favored the bullish trend whereas Eurozone Industrial Production monthly report on 9th March and US CPI monthly report on 10th March favored the bearish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Eurozone Industrial Production monthly report at Mar 14, Eurozone ZEW Economic Sentiment Indicator, NY Fed Empire State Manufacturing Index at Mar 15, US Retail Sales monthly report, Fed Interest Rate Decision at Mar 16, Initial Jobless Claims, US Fed Industrial Production yearly report at Mar 17 and Fed Governor Bowman Speech at Mar 18.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 1.11% lower than the previous week. Maintaining high at 1.1121 and low at 1.0806 showed a movement of 315 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 1.0769 proves to be unreliable support then the pair may fall further to 1.0630 and 1.0454 respectively whereas a solid breakout above 1.1084 will open a clear path upward to 1.1260 and then will further raise up to 1.1399. Chart formation of a bearish pennant pattern in H4 chart sets prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.

Preference
Sell: 1.0908 target at 1.0631 and stop loss at 1.1089

 

Alternate Scenario
Buy: 1.1089 target at 1.1398 and stop loss at 1.0908

CAD is favored being a commodity linked currency

  • Investors bet that commodity producing economies will take up the slack left by disruptions to Russia’s exports.
  • The carnage in the oil prices has not impacted much on the loonie.
  • Hopes of strong employment data from Canada underpins the CAD bulls.

 

The Canadian dollar strengthened against its U.S. counterpart on Friday as market now bet that commodity producing economies will take up the slack left by disruptions to Russia’s exports.

Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. said “Many people see the commodity story as a key driver right now.”

The Canadian dollar gained strength despite of the fall in crude oil. The WTI crude oil prices dropped during the last three days, and reached to the biggest weekly loss of $105.80 on the previous day and this is so far biggest loss, since November 2021. The oil’s latest losses could be related to the global producers’ readiness, including Russia’s, to adhere to output commitments and ease the strain on supplies caused due to geopolitical factors.

Meanwhile, hopes of a strong monthly employment report from Canada also favored the CAD bulls to ignore the recently softer prices of the nation’s key export item and fall of WTI crude oil. The headlines Net Employment Change is likely to reverse the previous -200.1K figures with 160K while the Unemployment Rate is expected to ease from 6.5% to 6.2%.

The Bank of Canada raised interest rates last week for the first time in three years. And now Jobs data can boost expectation for further tightening next month.

On the geopolitical front, a total disappointment from negotiations recently joined news that Russian forces attacked Kharkiv institute that contains an experimental nuclear reactor to weigh on the sentiment. Moreover, the ECB’s faster tapering announcement, as well as a fresh 40-year high of the US headline inflation data were additional strains on the market sentiment.

USD/CAD 4 Hour Chart:

Support: 1.2729 (S1), 1.2694 (S2), 1.2638 (S3).

Resistance: 1.2820 (R1), 1.2876 (R2), 1.2911 (R3).

Moving on, the headlines from the Russia-Ukraine tussle will have a significant impact on the pair. Market will also focus on Michigan Consumer Sentiment Index and Canada Employment data, which is due on Friday. In the meantime, we expect a bearish trend for USD/CAD.