Weekly Forex Market Analysis: US Dollar Remains In Bullish Condition Ahead of FOMC Meeting
The US Dollar, being the most widely traded currency, has been reported to have hit a bullish gain of +0.65% within the DXY index gauge that was measured last week. In preparation for the rising Fed rate hike expectation amongst many market players, it should be noted that the overall bullish power of the dollar still remains captive. Hence, in the subsequent days of this week's trading session, the major currency market will more often than respond to the forthcoming Fed's interest rates announcements in the US. Alongside the Bank of England (BOE) and the Bank of Japan (BOJ) are also among the high-profile central banks that'll be having its national monetary policy conference this week.
Unlike every other financial market, the major currency sector would tend to be exposed to high volatility market conditions in response to the top class economic status update that surrounds the majors and their counterparts. And on top of that influx, a high volume of market participants and the interbank markets will have all of their eyes focused on the US federal reserve meetings. With this in mind, forex traders should be aware of the fixed interest maintained by the Federal Reserve which has been set at 0 25%, however, this rate will be the benchmark for establishing monetary policy decisions.
What To Expect In The Major Currency Market This Week
While the major currency market is considered to consist of high liquidity trading instruments, in general, the sentiment and the market structure of the major currency pairs, will determine whether the upcoming fundamental analysis reports could trigger the actions of the buyers and the sellers to win against their opposition.
Top Picked Major Pairs
However, in regards to trading the majors this week, below are some of the tops picked pairs you should watch out for.
EUR/USD opened the previous week around the 1.18s zone and closed the week at 1.17226 which represents a bearish market. Still, looking at the weekly chart the pair could maintain the double top chart pattern present on the weekly time frame in favour of moving price on a continuous downward stream. In as much as the bears are willing to take charge of the market price, buyers will have to relax while the bears take profits.
The EUR/USD pair shares a similar chart pattern in the price action that was seen in the last trading round which was responsible for the first double top chart pattern formation.
The first move towards the key resistance level took place in December 2020 and the second move towards resistance took place in May 2021. After the price touched the initial key resistance level the market had pulled back to the first support during April 2021.
Trading recommendation for the EURUSD pair
If the price of the pair fails to break below the neck of the double top pattern. Conversely, it could tend to continue in a tight range market direction. While the volatility of eurusd approaches a multi-year low on the monthly time chart. In this case, increased volatility would be welcome in the market in the coming trading session.
AUDUSD continues to get weaker against the dollar in the past two trading weeks. Last week the AUD/USD pair opened at 0.7364 and closed at 0.72607, representing a bearish market situation. On the other hand, the presence of low volatility took charge of the AUD/USD market at the opening of the last trading session. From a candlestick pattern viewpoint, the AUD/USD pair started the previous trading week with a gravestone Doji candlestick before taking the price lower. However, the market Price eyes new support at 0.71075.
Also USDCAD set a bullish target towards 1.2946 as the price closed the previous session at 1.2765. Streaming down to a lower time frame it was discovered that the pair had just concluded a tight range movement. Hence stronger dollar presence in the strength of the greenback could foster a positive bullish power over the USDCAD market.
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