Week Ahead Analysis – 29

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Economic Calendar

DayEvents
MondayJPY Bank Holiday
TuesdayAUD Monetary Policy Meeting, BOE Bailey and RBA Lowe speaks
WednesdayGBP CPI
ThursdayBOJ Outlook Report, EUR Main refinancing rate, ECB Press conference
Friday

GBPUSD

GBPUSD Daily Chart

BOE’s current main goal is to fight inflation and governor Bailey’s speech may drop some hints about the next monetary policy moves.

GBP is doing great with GBPUSD rose by more than 56 pips since the market opened this morning. It is now testing 1.1925 resistance which coincides with the bearish trendline. We are waiting to see if the price can break and close successfully above this level.

First scenario: If it breaks, we will have a buy opportunity when price retest the resistance-turned-support at 1.1925.

Second scenario: If the trendline and resistance level remain intact, price may fall to 1.1760 previous swing low. If that breaks too, we are looking at a downside continuation towards 1.1500 daily timeframe key support.

Technical LevelsPrice Zone
R21.2000
R11.1925
S11.1760
S21.1500

EURUSD

EURUSD Daily Chart

At the time of writing, EURUSD has bounced 140 pips away from parity which shows some demand at 1.0000. The question is whether this up move is a knee-jerk reaction (minor retracement), or is it a long term reversal in the making.

The next level of interest is 1.0350 (if the price goes there) as this is where the trendline and the horizontal resistance level will most likely meet.

First scenario: A reversal takes place in the market and EURUSD broke above the trendline, we are targeting 1.0650 although this may not happen so soon

Second scenario: Bearish momentum continues and EURUSD test parity again. If it does happen, our view is that the sellers are much stronger and may be able to push prices further below, targeting 0.9900.

Technical LevelsPrice Zone
R21.0650
R11.0350
S11.0000
S20.9900

XAUUSD

XAUUSD H4 Chart

Gold might be calmer this week as there are no major events that are gold/ USD related. It is approaching the upper trendline and we are waiting for reactions.

Scenario 1: Trendline is broken and gold tests 1745. Depending on market expectations, it could then break higher above 1745 or retrace back down.

Scenario 2: Trendline remains intact and gold proceeds to glide lower until 1700 support and possibly testing 1680.

SP500

SP500 Daily Chart

The S&P500 had a not-so-bad week last week after a decent recovery on Friday. The outlook for the stock markets is still highly dependent on interest rates expectations and  recessionary concerns.

From a technical standpoint, SP500 is trading just under the bearish trendline. 

Scenario 1: SP500 breaks through the trendline and head towards 4150

Scenario 2: The trendline is respected and the index continues to trade lower, testing first support at 3750.

Technical LevelsPrice Zone
R24150
R13950
S13750
S23600

USOIL

USOIL H4 Chart

WTI crude has had a decent recovery since Thursday last week, trading back at triple digits.
This could be due to a softer USD as we saw on EURUSD and GBPUSD also. Let’s see if the concern of tight supplies will outweigh fear of recession in the coming days.

Technical LevelsPrice Zone
R2105
R1102
S194
S290

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