In last week’s Week Ahead Analysis video we highlighted the risk in the market was reducing which can often see haven currencies like the USD benefit. The EURUSD price suffered because of this and the USD remained strong seeing the EURUSD price reject the major 1.0600 highs again with price falling over 200 pips to the key lows. If the risk sentiment remains and stocks continue to underperform we could see the USD strength force this market lower.
Similar to the EURUSD outlook we looked for NZDUSD to continue to move lower as the strength meter highlighted the kiwi was the weakest currency. When looking at the chart we highlighted the recent area where sellers entered the market and how this could act as resistance for further selling opportunities. The price did hold at this level and failed to make any new highs and the price fell breaking through the weekly lows. This is a significant breakout and we could see further downside pressure form for the NZDUSD pair.
GBPJPY was featured in the week ahead analysis video this week because the JPY was getting stronger on the strength meter in line with the recent stock market moves. In a EURJPY video this week we also highlighted that the US 10YR was falling and the strong correlation between the JPY and this market meant we could see some JPY strength. The price rallied initially off the weekly point of control area, however then hit our area of resistance which was formed from an area where sellers were in the past. These sellers entered again in this area and the price moved back towards a point of control from the previous week that had been untested.
We featured EURJPY this week because the EURO was getting weaker after reaching the reversal highs on the strength meter. This combined with the analysis already done on the JPY offered short trading ideas this week. Similarly to the GBPJPY the price rallied into the key swing highs and rejected offering reversal opportunities from the resistance. The price fell aggressively lower showing how the JPY is strengthening in the current market conditions. If these conditions were to remain we will likely see this market continue its current path lower.