AUD/USD Weekly Forecast (18th April 2022 – 22nd April 2022)

Fundamental view:

The Australian dollar fell against the American dollar for the second consecutive week. Market was  priced in the US Federal Reserve’s aggressive monetary policy stance which weighed on the Aussie. Market sentiment was sour amidst a coronavirus outbreak in China, leading to local lockdowns and the Eastern European crisis. President Vladimir Putin has said that diplomatic talks are at a dead-end, as Kyiv has broken the agreement reached in Turkey. Attacks continue, and western nations keep piling up sanctions on Russia. The Ukraine crisis led to the rise of commodity prices which helped the Commodity linked currency Aussie.

The Fed policymakers reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet .New York Fed President John Williams said that a half-point hike at the May 4 meeting  was a “very reasonable option” but that the pace of increases depends on the economy. Meanwhile, the Australian data was mixed this week.

In this week, Australia NAB Business Confidence on 12th April and Australia Employment Change and US Initial Jobless Claims on 14th April  boosted bullish trend whereas FOMC Member Williams Speech on 11th April and Westpac-MI Consumer Sentiment monthly report on 13th April boosted bearish trend.

The major economic events deciding the movement of the pair in the next week are RBA Meeting Minutes, US Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, Australia S&P Global Manufacturing PMI, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21 and US S&P Global Manufacturing PMI at Apr 22. 

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 2.18% lower than the previous week. Maintaining high at 0.7493 and low at 0.7388 showed a movement of 105 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 0.7362 proves to be unreliable support then the pair may fall further to 0.7322 and 0.7257 respectively whereas a solid breakout above 0.7467 will open a clear path upward to 0.7532 and then will further raise up to 0.7572. In H4 chart descending triangle breakout favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.7401 target at 0.7297 and stop loss at 0.7471

 

Alternate Scenario
Buy: 0.7471 target at 0.7571 and stop loss at 0.7401

USD/JPY Weekly Forecast (18th April 2022 – 22nd April 2022)

Fundamental view:

US dollar rallied against the Japanese yen during the trading course of the week. The hawkish fed and Risk sentiment due to the Ukraine war boosted the greenback. The Fed policymakers reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet .New York Fed President John Williams said that a half-point hike at the May 4 meeting  was a “very reasonable option” but that the pace of increases depends on the economy. The Ukraine war is a ugly one and a cease-fire seems unlikely. Russia reported that the flagship of its Black Sea fleet had been sunk. Kiyv claimed the attack. Negotiations continued.  However the Ukrainian foreign minister said there had been no progress. 

On the other hand, The Bank of Japan (BoJ) has noticed the rapid depreciation of the yen saying it is watching the market closely but with national CPI at 0.9% annually in February and core at -1%, it is not about to intervene in the currency markets. 

In this week, BoJ Corporate Goods Price Index monthly report on 12th April and US Initial Jobless claims on 14th April boosted bearish trend whereas FOMC Member Williams Speech on 11th April, US CPI monthly report on 12th April and Japan Core Machinery Orders monthly report on 13th April boosted the bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Industrial Production monthly report, US Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21, Japan au Jibun Bank Manufacturing PMI and US S&P Global Manufacturing PMI at Apr 22.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 1.60% higher than the previous week. Maintaining high at 126.67 and low at 124.18 showed a movement of 249 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 127.35 may open a clean path towards 128.25 and may take a way up to 129.84. Should 124.86 prove to be unreliable support, the USDJPY may sink downwards 123.27 and 122.37 respectively. In H4 chart, Formation of bullish pennant pattern indicates continuation of the trend creating prospects of a bullish trend Along with a bullish hammer formation braces our expectation.

Preference
Buy: 126.45 target at 128.24 and stop loss at 125.71

 

Alternate Scenario
Sell: 125.71 target at 123.28 and stop loss at 126.45

GBP/USD Weekly Forecast (18th April 2022 – 22nd April 2022)

Fundamental view:

The Britain pound traded up against the US dollar during the trading course of the week, However Broad US dollar strength did not allow pound to gain much. The risk averse market sentiment due to Russia- Ukraine conflict and the hawkish Fed helped the US dollar. US Federal Reserve officials reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet.

On the other hand, The Bank of England (BOE) is facing a tougher balancing act than the US Federal Reserve with regard to policy tightening. Both central banks are looking to battle inflation but the BOE is growing increasingly concerned over the uncertainty surrounding the growth outlook in the face of a protracted Russia-Ukraine conflict.

In this week, US CPI monthly report on 12th April and US PPI monthly report on 13th April boosted downtrend whereas UK Manufacturing Production monthly report on 11th April , Uk Claimant Count Change on 12th April and US Initial Jobless Claims on 14th April boosted the uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US Building Permits at Apr 19, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, BoE Governor Bailey Speech, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21, UK Retail Sales monthly report and US S&P Global Manufacturing PMI at Apr 22.

GBP/USD Weekly outlook:

Technical View:

Last week’s high was 0.15% lower than the previous week. Maintaining high at 1.3147 and low at 1.2973 showed a movement of 174 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 1.2973 proves to be unreliable support then the pair may fall further to 1.2886 and 1.2799 respectively whereas a solid breakout above 1.3147 will open a clear path upward to 1.3234 and then will further raise up to 1.3321. Chart formation of bearish crab pattern in H4 chart favors prospects of a bearish trend. Bearish harami pattern formation escalates the expectation for a bearish trend.

Preference
Sell: 1.3058 target at 1.2887 and stop loss at 1.3152

 

Alternate Scenario
Buy: 1.3152 target at 1.3320 and stop loss at 1.3058

EUR/USD Weekly Forecast (18th April 2022 – 22nd April 2022)

Fundamental view:

The Euro fell against the US dollar for the second consecutive week. The key catalyst for this move is the European central Bank’s (ECB) monetary policy update since President Christine Lagarde & co announced they would introduce no changes to their monetary policy. Market was expecting for a hawkish stance and rate hike from ECB whereas on contrary, ECB left rates on hold and repeated the asset purchase programs would end in Q3. Monthly net purchases will amount to €40 billion in April, €30 billion in May and €20 billion in June. President Christine Lagarde said it was “premature” to discuss quantitative tightening, adding that rate hikes could begin “sometime after”  the end of the APP program.

On the other hand, US Federal Reserve officials reiterated a 50 bps rate hike in May and paved the way for a reduction of the balance sheet. This monetary policy divergence between ECB and Fed weighed on the Euro.

In this week, EIA Crude Oil Stocks Change on 13th April and US Initial Jobless Claims on 14th April underpinned the pair whereas US CPI monthly report and ZEW Economic Sentiment Indicator on 12th April and ECB Interest Rate Decision on 14th April undermined the pair- EUR/USD.

The major economic events deciding the movement of the pair in the next week are US Building Permits at Apr 19, Eurozone Industrial Production monthly report, EIA Crude Oil Stocks Change, Fed Beige Book at Apr 20, Eurozone Core CPI monthly report, US Philadelphia Fed Manufacturing Index, Initial Jobless Claims, Fed Chair Powell Speech at Apr 21 and US S&P Global Manufacturing PMI at Apr 22.

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 1.09% lower than the previous week. Maintaining high at 1.0933 and low at 1.0757 showed a movement of 176 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 1.0731 proves to be unreliable support then the pair may fall further to 1.0656 and 1.0555 respectively whereas a solid breakout above 1.0907 will open a clear path upward to 1.1008 and then will further raise up to 1.1083. Chart formation of a bearish ABCD pattern in H4 chart sets prospects for a bearish trend. Bearish harami formation in H4 chart escalates the expectation for a bearish trend.

Preference
Sell: 1.0805 target at 1.0657 and stop loss at 1.0912

 

Alternate Scenario
Buy: 1.0912 target at 1.1082 and stop loss at 1.0805