XAU/USD Weekly Forecast (31th January 2022 – 04th February 2022)

Fundamental view:

The yellow metal plummeted against the US dollar during the trading course of the week. The fall of the gold prices can be related to the Market cheering the US Federal Reserve’s (Fed) signals of the March rate hike and room for more lift-offs. The Central bank has left the rate unchanged however he also made a notable change of tone toward the hawkish side. The major market mover was Fed Chair noting that he will not rule out rate increase at every meeting this year. He also opened the door to 50bp rate hikes rather than standard 25bp.  On the economy front, Powell said “quite a bit of room to raise rates without hurting employment.” Additionally, escalating geopolitical fears concerning the Russia-Ukraine issue also drown the gold prices.

Moreover, The greenback is also favored on the fourth-quarter GDP that had rose 6.9% saar vs expectations of a 5.5% rise. The GDP price index has also beat the expectations, rising 6.9% saar.              

The major economic events deciding the movement of the pair in the next week are ISM Manufacturing PMI at Feb 01, ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, Initial Jobless Claims, ISM Non-Manufacturing PMI at Feb 03 and Nonfarm Payrolls at Feb 04 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.32% higher than the previous week. Maintaining high at 1853.8 and low at 1780.2 showed a movement of 736 pips.

In the upcoming week we expect XAU/USD to show a bearish trend. The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 1763.1 proves to be unreliable support then the pair may fall further to 1734.9 and 1689.5 respectively whereas a solid breakout above 1836.7 will open a clear path upward to 1882.1 and then will further raise up to 1910.3. In H4 chart rounding top pattern favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.

Preference
Sell: 1791.4 target at 1721.5 and stop loss at 1840.7

 

Alternate Scenario
Buy: 1840.7 target at 1909.3 and stop loss at 1791.4

AUD/USD Weekly Forecast (31th January 2022 – 04th February 2022)

Fundamental view:

The Australian dollar plummeted against the American dollar during the trading course of the week. The monetary policy announcement from the central bank was the major catalyst in underpinning the uptrend of the US dollar. The Central bank has left the rate unchanged however he also made a notable change of tone toward the hawkish side. The major market mover was Fed Chair noting that he will not rule out rate increase at every meeting this year. He also opened the door to 50bp rate hikes rather than standard 25bp. On the economy front, Powell said “quite a bit of room to raise rates without hurting employment” and stressed that sustaining a long economic expansion means price stability.

Additionally, The Aussie seems to be pressured by the falling prices of metals, Yellow metal had shed roughly $50 per troy ounce in the last two days. And the Silver fell to $22.60.

In this week, Australia CPI quarterly report on 25th January and US Retail Inventories monthly report on 26th January favored uptrend Whereas Commonwealth Bank Manufacturing PMI on 24th January, FOMC press conference on 26th January and US Core Durable Goods Orders monthly report on 27th January favored downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are RBA Interest Rate Decision, Australia Retail Sales monthly report, US ISM Manufacturing PMI at Feb 01, RBA Governor Lowe Speech, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, Initial Jobless Claims, US ISM Non-Manufacturing PMI at Feb 03 and US Nonfarm Payrolls at Feb 04.    

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 1.21% lower than the previous week. Maintaining high at 0.7187 and low at 0.6967 showed a movement of 220 pips.

In the upcoming week we expect AUD/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 0.6904 proves to be unreliable support then the pair may fall further to 0.6825 and 0.6684 respectively whereas a solid breakout above 0.7124 will open a clear path upward to 0.7265 and then will further raise up to 0.7344. In H4 chart descending scallop pattern formation favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.6982 target at 0.6765 and stop loss at 0.7129

 

Alternate Scenario
Buy: 0.7129 target at 0.7343 and stop loss at 0.6982

USD/JPY Weekly Forecast (31th January 2022 – 04th February 2022)

Fundamental view:

The US dollar edged high against the Japanese yen this week. The Federal bank monetary policy announcement strengthened the US dollar. The Central bank has left the rate unchanged however he also made a notable change of tone toward the hawkish side. The major market mover was Fed Chair noting that he will not rule out rate increase at every meeting this year. He also opened the door to 50bp rate hikes rather than standard 25bp. On the economy front, Powell said “quite a bit of room to raise rates without hurting employment” and stressed that sustaining a long economic expansion means price stability. That is different than the previous focus on employment.

On the other hand, The BOJ will not tighten policy in future. If anything, another spending package can be expected from Prime Minister Fumio Kishida’s government which is pointless but by now, traditional endeavor for a new leader.

In this week, BoJ Summary of Opinions on 26th January and US Pending Home Sales monthly report on 27th January favored bearish trend whereas Japan Markit Services PMI on 24th January, FOMC press conference on 26th January and US GDP quarterly report on 27th January favored bullish trend.

The major economic events deciding the movement of the pair in the next week are  Japan Unemployment Rate at Jan 31, Japan Markit Manufacturing PMI , US ISM Manufacturing PMI at Feb 01, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, Initial Jobless Claims, US ISM Non-Manufacturing PMI at Feb 03 and US Nonfarm Payrolls at Feb 04. 

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.54% higher than the previous week. Maintaining high at 115.68 and low at 113.47 showed a movement of 221 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 117.02 and may take a way up to 118.37. Should 113.95 prove to be unreliable support, the USDJPY may sink downwards 112.60 and 111.74 respectively. In H4 chart, Formation of rounding bottom pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish engulfing formation braces our expectation.

Preference
Buy: 115.29 target at 117.45 and stop loss at 113.90

 

Alternate Scenario
Sell: 113.90 target at 111.75 and stop loss at 115.29

GBP/USD Weekly Forecast (31th January 2022 – 04th February 2022)

Fundamental view:

Pound traded low against the US dollar. US Central bank’s monetary policy announcement was the major catalyst in deciding the move of the pair this week. Federal bank has meet the expectation by keeping the rates and tapering unchanged and repeated that pandemic related financial support will end in March. The Fed Chairman Jerome Powell provided many hawkish signals in his press conference. He told that he will not rule out a rate hike in every meeting this year and also gave hint of March Liftoff. Tensions in the Russia-Ukraine front also remained elevated this week, since the diplomatic talks dragged on, while Russia is continuing its amassing troops. As of now, it is not clear on what President Vladimir Putin wants, However hopes that an invasion would be at least delayed until after the Winter Olympics in Beijing seemed to ease the market fears.

On the other hand, In the UK, politics is the main focus. Prime Minister Boris Johnson is being asked to resign and also a police investigation is called for, on top of an inquiry made by a civil servant. This political drama seems to pressure the sterling to some extent.

In this week, US Goods Trade Balance on 26th January and US Initial Jobless Claims on 27th January boosted uptrend whereas UK Markit/CIPS Manufacturing PMI on 24th January , FOMC Press Conference on 26th January and US GDP quarterly report on 27th January boosted downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are US ISM Manufacturing PMI at Feb 01, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change at Feb 02, BoE Interest Rate Decision, BoE Governor Bailey Speech, Initial Jobless Claims, US ISM Non-Manufacturing PMI at Feb 03 and US Nonfarm Payrolls at Feb 04. 

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.91% lower than the previous week. Maintaining high at 1.3565 and low at 1.3358 showed a movement of 207 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 1.3315 proves to be unreliable support then the pair may fall further to 1.3233 and 1.3108 respectively whereas a solid breakout above 1.3522 will open a clear path upward to 1.3647 and then will further raise up to 1.3729. Chart formation of bearish flag pattern in H4 chart favors prospects of a bearish trend. Dark Cloud Cover pattern formation escalates the expectation for a bearish trend.

Preference
Sell: 1.3395 target at 1.3191 and stop loss at 1.3527

 

Alternate Scenario
Buy: 1.3527 target at 1.3728 and stop loss at 1.3395