Weekly Analysis – EUR/USD, AUD/NZD, AUD/USD, USD/JPY, CAC40

Previous week overview

As analysts were observing yellen’s testimony closely to extract the next rate hike, Yellen gave no clue. Nevertheless, she gave an alarm towards Trump’s new unknown policy which would lead to changes in the Fed’s policy as well. Also we had seen the underestimated UK inflation numbers which took the GBP back to the historical low levels.

It is very important to highlight the pervious weekly forecast. GBP/AUD  (forecasted as bearish) tumbled to 1.6100. Yen pairs (sideways movements for hedge opportunities), USD/JPY moved between 115-112.50, CAD/JPY 87.77-85.90. And finally the FTSE futures (forecasted to reach 7280) actually closed the week at that level.

Next week outlook

On the fundamental side we have on Tuesday BOE Governor Mark Carney Speaks in U.K. Parliament. In addition, on Wednesday, we have UK GDP and FOMC meeting minutes release. This week will put some weights on the British Pound, so frankly me myself will avoid trading in the pound and be waiting for the triggering signal.

EUR/USD – hedging opportunity

The pair is stuck in the sideways area. It will keep moving between two levels (1.0520 – 1.0830) until if find some kind of motivation. (Good hedge opportunity but take profit just before these levels). This pair is not advised to long or medium term traders, it holds high risk during the year!

AUD/NZD – long term trade

This pair is excellent bearish pair for the long term traders; nevertheless, it may diverge for short period. For long term strategies I would recommend this pair, since the fundamentals are giving stronger Kiwi before Aussie. In the weekly chart below you can notice the symmetric triangle accompanied by symmetric stochastic triangle. This is very rare unique and harmonized situation.

AUD/USD – trade of the week

Technicals and fundamentals are showing a prominent weekly trade. The AUD/USD before all its pairs is showing a reversal, add to that the risk off that will face the USD next week before the FOMC minutes release. As we can see on the chart, the price is curving. In addition, the pair is forming divergence with the stochastic.

USD/JPY – hedge opportunity

Yen pairs are in unusual case by loosing motivation. USD/JPY will keep ranging between (111.14 – 115.50). Yen pairs are excellent hedging opportunities. The USD/JPY ranging between the previous levels with some kind of bullishness towards 115.00.

CAC40 Futures – stay & watch

The CAC40 Index and CAC40 futures seems to me as the (tractor) of the markets next week. All indices worldwide prepare for something – will explain in details next week in a special article – markets are in a very critical point as all markets are stretched and waiting for fundamental reasons to correct. Currently, CAC40 seems to influence the markets more than other indices. The price may move higher to 4932 and then to test 5100 & 5200 (for the longer term).

Good luck