AUD/USD Weekly Forecast (24th January 2022 – 28th January 2022)

Fundamental view:

Australian dollar went back and forth against the US dollar during the trading course of the week. Multiple catalysts like inflation, aggressive policy from the Fed, China’s slowing economy and Russia’s potential military action favored the US dollar while upbeat employment and inflation data favored the Aussie. Australia faced many lockdowns throughout last year 2021 and has started reopening’s by the end of the year. This is the reason it showed outstanding job creation in November, followed by an upbeat December report released this week. Australia added 64.8K positions in the month, which is more than double of the market’s expectations. Moreover January Consumer Inflation Expectations contracted to 4.4% from 4.8% previously.

On the other hand, The US central bank is about to have a monetary policy meeting next week and will announce the monetary policy decision on January 26. Traders are expecting for clearer hints about upcoming rate hikes. Investors are pricing in a first rate hike for March 2022 and at least three hikes through the year.

In this week, Australia Unemployment Rate and US initial Jobless claims on 20th January and framed uptrend whereas TIC Net Long-Term Transactions on 18th January and Westpac-MI Consumer Sentiment monthly report on 19th January favored downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are RBA Weighted Median CPI quarterly report, US CB Consumer Confidence Index at Jan 25, Fed Interest Rate Decision, FOMC Press Conference at Jan 26, US GDP quarterly report, US Core Durable Goods Orders monthly report, Initial Jobless Claims at Jan 27, Australia PPI quarterly report and Michigan Consumer Sentiment at Jan 28.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.51% lower than the previous week. Maintaining high at 0.7276 and low at 0.7169 showed a movement of 107 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 0.7136 proves to be unreliable support then the pair may fall further to 0.7099 and 0.7029 respectively whereas a solid breakout above 0.7243 will open a clear path upward to 0.7313 and then will further raise up to 0.7350. In H4 chart bearish shark pattern formation favors prospects of a bearish trend. Also to be noted dark cloud formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.7175 target at 0.7076 and stop loss at 0.7248

 

Alternate Scenario
Buy: 0.7248 target at 0.7349 and stop loss at 0.7175

USD/JPY Weekly Forecast (24th January 2022 – 28th January 2022)

Fundamental view:

USD/JPY had a fall and reached to a one-month low of 113.60 during the trading course of the week. The US central bank is about to have a monetary policy meeting next week and will announce the monetary policy decision on January 26. Meanwhile Traders have priced in the Fed’s first hike in March and are expecting details on the rate course for the remainder of the year and the prospective balance sheet reduction at the Wednesday Federal Open Market Committee (FOMC) meeting. 

On the other hand, BOJ meeting this week brought no surprises, Japanese overnight call rate unchanged at -0.1%, where it has been for five years. The BOJ said the “recovery was becoming clearer” this is a marginally more positive view than the ‘picking up as a trend’ judgement in October, which seems to indicate the latest viral surge is not creating major dislocations. Japan’s economy had shrank at a 3.6% annualized rate in the third quarter. 

In this week, TIC Net Long-Term Transactions and Japan Industrial Production monthly report on 18th January favored bullish trend whereas US initial jobless claims and Japan Adjusted Trade Balance on 20th January and Japan CPI yearly report on 21st January favored bearish trend.

The major economic events deciding the movement of the pair in the next week are Japan Markit Manufacturing PMI at Jan 24, BoJ Summary of Opinions, US CB Consumer Confidence Index at Jan 25, Fed Interest Rate Decision, FOMC Press Conference at Jan 26, US GDP quarterly report, US Core Durable Goods Orders monthly report, Initial Jobless Claims at Jan 27 and Michigan Consumer Sentiment at Jan 28.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 0.68 lower than the previous week. Maintaining high at 115.06 and low at 113.60 showed a movement of 146 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout above 114.61 may open a clean path towards 115.56 and may take a way up to 116.07. Should 113.15 prove to be unreliable support, the USDJPY may sink downwards 112.64 and 111.69 respectively. In H4 chart, if breakout of the falling wedge is to the upside then bullish expectation is favored. Also to be noted Invert hammer formation exerts the expectation of uptrend for the pair.

Preference
Buy: 113.70 target at 115.05 and stop loss at 113.10

 

Alternate Scenario
Sell: 113.10 target at 111.71 and stop loss at 113.70

GBP/USD Weekly Forecast (24th January 2022 – 28th January 2022)

Fundamental view:

The British pound gave up gains this week and suffered due to recent strength of the US dollar.  The US dollar gained strength due to many reasons like Federal Reserve decision and Worries about China also adds to the gloomy sentiment favoring the USD. Russia-Ukraine tensions exacerbated worries in turn favoring the safe haven US dollar. The US central bank is about to have a monetary policy meeting next week and will announce the monetary policy decision on January 26. Traders are expecting for clearer hints about upcoming rate hikes. Investors are pricing in a first rate hike for March 2022 and at least three hikes through the year.

On the other hand, uncertainty about the political future of Prime Minister Boris Johnson weighs on the pound. While Downing Street asks the public to wait for the results of an official inquiry, few Conservative MPs are reportedly plotting against the PM. Unflattering opinion polls provide back wind to these efforts. 

In this week, UK Core CPI monthly report on 19th January and US Initial Jobless Claims on 20th January created uptrend whereas UK Unemployment Rate on 18th January and US Building Permits on 19th January created downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are UK Markit/CIPS Manufacturing PMI at Jan 24, US CB Consumer Confidence Index at Jan 25, Fed Interest Rate Decision, FOMC Press Conference at Jan 26, UK Nationwide HPI yearly report, US GDP quarterly report, US Core Durable Goods Orders monthly report, Initial Jobless Claims at Jan 27 and Michigan Consumer Sentiment at Jan 28.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.42 lower than the previous week. Maintaining high at 1.3689 and low at 1.3545 showed a movement of 144 pips.

In the upcoming week we expect GBP/USD to show a bearish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the downside. Should 1.3502 proves to be unreliable support then the pair may fall further to 1.3451 and 1.3358 respectively whereas a solid breakout above 1.3646 will open a clear path upward to 1.3739 and then will further raise up to 1.3790. Chart formation of inverted cup and handle pattern in H4 chart favors prospects of a bearish trend. Bearish engulfing pattern formation escalates the expectation for a bearish trend.

Preference
Sell: 1.3555 target at 1.3412 and stop loss at 1.3651

 

Alternate Scenario
Buy: 1.3651 target at 1.3789 and stop loss at 1.3555

EUR/USD Weekly Forecast (24th January 2022 – 28th January 2022)

Fundamental view:

The Euro fell hard during this week. The quote EUR/USD lost the most on Tuesday when government bond yields raised to levels last seen in February 2020. The benchmark 10-year US Treasury bond yield surged to its highest level at 1.89% which helped the greenback preserve its strength mid-week. Amidst Yields surge, other catalysts like inflation, aggressive policy from the Fed, China’s slowing economy and Russia’s potential military action also favored the greenback. The US central bank is about to have a monetary policy meeting next week and will announce the monetary policy decision on January 26. Traders are expecting for clearer hints about upcoming rate hikes. Investors are pricing in a first rate hike for March 2022 and at least three hikes through the year.

On the other hand, The European Central Bank policymakers keep acknowledging that persistently high inflation might last longer than anticipated and even move above their comfort zone, Additionally, they are not about to retrieve financial support and they are maintaining a cautious stance.

In this week, Eurozone PPI monthly report and US initial Jobless claims on 20th January favored uptrend whereas Eurozone Trade Balance on 18th January and US Building permits on 19th January favored downtrend for the pair

The major economic events deciding the movement of the pair in the next week are Eurozone group Ifo Business Climate, US CB Consumer Confidence Index at Jan 25, Fed Interest Rate Decision, FOMC Press Conference at Jan 26, US GDP quarterly report, US Core Durable Goods Orders monthly report, Initial Jobless Claims at Jan 27, Eurozone group GDP quarterly report and Michigan Consumer Sentiment at Jan 28.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.42% lower than the previous week. Maintaining high at 1.1434 and low at 1.1300 showed a movement of 134 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 100 Simple Moving Average and the MACD trades to the downside. Should 1.1282 proves to be unreliable support then the pair may fall further to 1.1224 and 1.1148 respectively whereas a solid breakout above 1.1416 will open a clear path upward to 1.1492 and then will further raise up to 1.1550. Chart formation of a descending scallop pattern in H4 chart sets prospects for a bearish trend. Shooting star formation in H4 chart escalates the expectation for a bearish trend.

Preference
Sell: 1.1340 target at 1.1225 and stop loss at 1.1424

 

Alternate Scenario
Buy: 1.1424 target at 1.1549 and stop loss at 1.1340