EUR/USD this week has started up in seriously positive note; it’s highly likely that we will see the trend continue on similar note, so it will be interesting to see how it all works out. We see the trend continuing in similar fashion, so it might be good chance for buy.
GBP/USD has been staying rather mixed, it will be interesting to see how it all works out, and so we should not enter into any trade as of now with no clear trend. However, it is important to note that the trend at the moment is hinting for buy but nothing is certain!
The week gone by was the one of risk-off which saw high volatility in major currencies like Euro, USD, GBP, JPY and CHF. This pair took care of the advantage and moved higher! There were supporting moves for Euro too with good economic data and budget surplus which showed a path of recovery and improvement in sentiments. Nothing much to look forward to next week but I think same theme might be played out and one needs to be careful enough!
A gain of around 1.2% was not bad for this pair even though this pair could not fully take advantage of the situation as its peer Euro did. Still GBP had a good time and seems there is no fear of the impending general elections in the UK on Jun 8th! There are some economic data/events scheduled for next week which might keep the traders busy though the main focus might be on politics/geo-politics!
The high of the price reached last week was 1.1297 and the low was 1.1133 as the week was quite volatile with FED in the backdrop but with some big miss on macroeconomic data’s and other factors USD is not exactly strong. So even with a rate hike the continued strength might not be sustained for long and the focus would shift to other areas too.
With nothing much going around for next week for both the currencies one can expect just some sideways trading and not any sharp move unless there is some important event! So going to be a dull week with the month also nearly coming to an end. I think GBP rally would be capped given the uncertainty surrounding various events but might tear towards heaven if there is any significant improvement!
Obviously the main mover last week was the FED interest rate decision which was as predicted and thus the price action did not warrant such high moves even though some macro economic data’s were very poor or just average. So with increased uncertainty on fiscal policy of USA the FED’s decision to keep hiking might cause some clash of interest later! As of now nothing much to be concerned off!
There were some macros economic data’s from Australia for last week which were quite positive and which naturally helped the pair push higher which even the FED rate hike could not undo. So there were plenty of opportunities for both buyers and sellers for this pair in the intra-day periods though overall bulls won the race. Nothing much for next week though so at best a sideways trading.
This pair moved downwards yesterday,and is currently below a key resistance level 1.1467. the previous day's candle is a possible bearish confirmation candle on the daily chat, and the price will likely continue moving upwards, going to the support level 1.1285. The anticipated bearish price rally is a mere corrective three wave cycle correcting the immediate five wave cycle. A key support level can seen around 1.11372, as long as this level protects the lower side, we expect the anticipated three wave cycle not close below it. Expect a similar wave count in GBPUSD, AUDUSD and EURHKD. These pairs will have a similar price rally during this intraday.
Trade Recommendations:
Expect a possible bearish price rally towards 1.1285
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An action filled week has gone by which saw the USD getting much weaker and there is no sign of immediate reversal in its fortune. One can expect some short term weakness of USD to persist but later there might be a pick-up in the price and course reversal. We have BoJ meet next week which provide what the CB is likely to do further and which would cause volatility.
