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

Fundamental view:

US dollar managed to trade high against its yen counterpart. The stronger than expected inflation figure and the hawkish comments from the Fed policymakers helped the US dollar this week. The US reported the January Consumer Price Index, which soared to 7.5% YoY against the forecast of 7.2%,and the jump was the highest level since February 1982. Immediately after this data, the market rushed to price in a 50 bps rate hike from the US Federal Reserve as soon as March. Thus the US dollar gained attention from the traders, On the other hand, Japan’s government officially announced a three-week extension to the quasi-emergency for Tokyo and 12 other prefectures the previous day. This may be the reason which pushes the Bank of Japan (BOJ) policymakers to refrain from the hawkish messages and keep easy money on the table.

BoJ Corporate Goods Price Index monthly report on 10th February and US Michigan Consumer Sentiment on 11th February boosted downtrend whereas Japan Current Account n.s.a. on 8th February and US CPI monthly and yearly report on 10th February boosted uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan GDP quarterly report at Feb 14, Japan Industrial Production monthly report, NY Fed Empire State Manufacturing Index at Feb 15, US Retail Sales monthly report, EIA Crude Oil Stocks Change, FOMC Minutes at Feb 16, Initial Jobless Claims and US Philadelphia Fed Manufacturing Index at Feb 17.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.65% higher than the previous week. Maintaining high at 116.34 and low at 114.91 showed a movement of 143 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 116.16 may open a clean path towards 116.97 and may take a way up to 117.59. Should 114.73 prove to be unreliable support, the USDJPY may sink downwards 114.11 and 113.30 respectively. In H4 chart, Formation of cup and handle pattern indicates continuation of the trend creating prospects of a bullish trend Along with a hammer formation braces our expectation.

Preference
Buy: 115.57 target at 116.96 and stop loss at 114.68

 

Alternate Scenario
Sell: 114.68 target at 113.31 and stop loss at 115.57

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

Fundamental view:

The UK Pound traded high against the US dollar this week, despite the US dollar strength. The UK pound still remains benefited from the hawkish BoE interest rate decision of last week.  The US Bureau of Economic Analysis reported on Thursday that annual inflation, as measured by the Consumer Price Index (CPI) had made a jump to its highest level since 4 decades at 7.5% in January. which is high than the market expectation of 7.2%.The stronger than expected inflation figure boosted the US dollar.

Woes regarding Brexit weighs on the GBP bulls since European Union (EU) and UK are attempting to start again the negotiations over the post-Brexit trading relationship in Northern Ireland (NI) which has failed till now. Amidst all the catalysts, Pound managed to portray uptrend against the greenback.

In this week, UK Halifax HPI monthly report on 7th February, US EIA Crude Oil Stocks Change on 9th February and US CPI monthly and yearly report on 10th February framed bearish outlook whereas UK RICS House Price Balance on 10th February and US Michigan Consumer Sentiment on 11th February framed bullish outlook for the quote.

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 Feb 15, US Retail Sales monthly report, EIA Crude Oil Stocks Change, FOMC Minutes at Feb 16, Initial Jobless Claims, US Philadelphia Fed Manufacturing Index at Feb 17 and UK retail sales monthly report at Feb 18.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.12% higher than the previous week. Maintaining high at 1.3643 and low at 1.3490 showed a movement of 153 pips.

In the upcoming week we expect GBP/USD to show a bearish trend.  The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. Should 1.3486 proves to be unreliable support then the pair may fall further to 1.3411 and 1.3333 respectively whereas a solid breakout above 1.3639 will open a clear path upward to 1.3717 and then will further raise up to 1.3792. Chart formation of alt bat pattern in H4 chart favors prospects of a bearish trend. Bearish harami pattern formation escalates the expectation for a bearish trend.

Preference
Sell: 1.3561 target at 1.3412 and stop loss at 1.3644

 

Alternate Scenario
Buy: 1.3644 target at 1.3791 and stop loss at 1.3561

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

Fundamental view:

The US dollar struggled to recover against its rival Euro, however it partially succeeded in earisng some of its losses of previous week.. Post ECB’s announcement favored the Euro this week. Inflation and the Central bank’s reaction towards it, are the major catalysts in the market now. Stronger than expected CPI data favored the US dollar. The US Bureau of Economic Analysis reported on Thursday that annual inflation, as measured by the Consumer Price Index (CPI) had made a jump to its highest level since 4 decades at 7.5% in January. which is high than the market expectation of 7.2%. The immediate reaction to the headline was Market rushing to price in a 50 bps rate hike from the US Federal Reserve as soon as March. Thus dollar got some attention from the traders which helped it to recover to some extent.

In this week, ECB President Lagarde Speech on 7th February, EIA Crude Oil Stocks Change on 9th February and US CPI monthly report and yearly report on 10th February favored bearish trend whereas Eurozone Retail Sales monthly report on 8th February and US Michigan Consumer Sentiment on 11th February favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are ECB President Lagarde Speech at Feb 14, Eurozone Employment Change quarterly report, Eurozone GDP quarterly report, NY Fed Empire State Manufacturing Index at Feb 15, ECB Non-monetary Policy Meeting, US Retail Sales monthly report, EIA Crude Oil Stocks Change, FOMC Minutes at Feb 16, Initial Jobless Claims and US Philadelphia Fed Manufacturing Index at Feb 17.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.10% higher than the previous week. Maintaining high at 1.1495 and low at 1.1329 showed a movement of 166 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 50 Simple Moving Average and the MACD trades to the downside. Should 1.1285 proves to be unreliable support then the pair may fall further to 1.1224 and 1.1119 respectively whereas a solid breakout above 1.1451 will open a clear path upward to 1.1556 and then will further raise up to 1.1617. Chart formation of a M-pattern in H4 chart sets prospects for a bearish trend. Dark cloud pattern formation in H4 chart escalates the expectation for a bearish trend.

Preference
Sell: 1.1346 target at 1.1193 and stop loss at 1.1456

 

Alternate Scenario
Buy: 1.1456 target at 1.1616 and stop loss at 1.1346

Stronger than expected inflation favors greenback

  • Stronger inflation data and hawkish comment from Federal Reserve’s James Bullard helps the US dollar to edge higher.
  • Chainalysis says “Ransomware operators are attacking bigger targets and stealing more funds than ever.”
  • According to the Fundstrat firm Fsinsight, BTC price could increase to around $200K per unit in 2022.

 

On Friday Asian trading session, Bitcoin traded low against the US greenback.  The US dollar traded high as the greenback preserves its strength on Friday. Stronger-than-expected inflation data from the US and the hawkish comments from the Federal Reserve’s James Bullard.

The US Bureau of Economic Analysis reported on Thursday that annual inflation, as measured by the Consumer Price Index (CPI) had made a jump to its highest level since 4 decades at 7.5% in January. which is high than the market expectation of 7.2% and thus provided a boost to US Treasury bond yields and in turn favored the greenback.

Moreover, hawkish comments from Federal Reserve’s James Bullard also boosted the sentiment for a 50bps rate hike in March. The aggressive comments from Bullard favored the US dollar after he said the “data had made him dramatically more hawkish” Bullard now wants a full percentage point of interest rate hikes by July 1. He even said that the Fed could raise rates at inter-meetings.

On the other hand, A report from blockchain data firm Chainalysis found that ransomware gangs are going after increasingly larger targets  and getting better at extorting big sums of cryptocurrency. The surge in payment sizes, according to the Chainalysis, is due to the growing sophistication of ransomware groups. Attacks have become more precise and efficient as hackers have leveraged third-party tools to take on a “big game hunting” strategy to make larger attacks on bigger targets. This recent news could have a negative impact on the oldest crypto – Bitcoin.

On contrary, According to the Fundstrat firm Fsinsight, BTC could increase by almost 500% from the current price point to around $200K per unit. The BTC price prediction stems from Fsinsight and the firm’s head of digital asset strategy, Sean Farrell. Both Fsinsight and Fundstrat are bullish about the upside potential of crypto assets as Fundstrat Global Advisors’ head of research recently insisted bitcoin still has “exponential growth ahead” of it.

BTC/USD 4 Hour chart:

Support: 42708.4 (S1), 41657.0 (S2), 40107.7 (S3).

Resistance: 45309.1 (R1), 46858.4 (R2), 47909.8 (R3).

The Stronger US inflation favors the greenback against its rivals. We expect a bearish trend for BTC/USD.