Weekly Forex Outlook: December 17-21, 2018Wednesday will be an important day for the US dollar. The Federal Reserve will announce the interest rate. Although the market anticipates a rate hike, the confidence is not as high as usual
What opportunities the week will give us?
Wednesday will be an important day for the US dollar. The Federal Reserve will announce the interest rate. Although the market anticipates a rate hike, the confidence is not as high as usual. Moreover, the tone of the central bank will affect the USD a lot. Follow the meeting to determine the strength of the USD. Also on Wednesday, traders will get a chance to trade on the British and Canadian inflation data and the New Zealand economic growth.
Thursday will be highlighted by central bank meetings. The Bank of Japan and Bank of England will release their interest rates. The market doesn’t expect any changes but banks’ speeches will determine directions of the currencies. Also that day, Australian jobs data will give an opportunity to trade.
The end of the week will bring important indicators for the US dollar, British pound and Canadian dollar. GDP, Core Retail Sales figures and Bank of Canada Business Outlook Survey will put pressure on the CAD. GDP and Core Durable Goods Orders will affect the USD. As for the GBP, current account data will either support the currency or pull it down. Let’s have a look at the technical side.
When the GBP recovers?
Last week was full of events related to Brexit. A postponed Parliament vote, a vote of confidence and the lack of willingness form the European Union to renegotiate the deal pulled the British pound down. The GBP/USD pair reached lows of April 2017. Risks of the further decline prevail as the market is waiting for the US rate hike that will support the US dollar. If there is more negative news on the Brexit and the USD is strong, the pair may fall to 1.2364. A breakthrough will provoke a plunge to lows of March 2017. Vice versa, the pair will be able to recover. A way to the first resistance is long.
What will happen to the EUR/USD?
On the weekly chart, the EUR/USD pair has been trading sideways for 7 weeks. If the Federal Reserve supports the USD, risks of the fall beyond the horizontal channel will increase. The support lies at 1.1120. If the USD isn’t that strong and the euro is encouraged, the pair will stick above 1.1424.
What is the trend of the USD/JPY?
The direction of the USD/JPY pair is also soft. To leave the sideways channel, the USD needs to push the pair above 114.40. If the USD is strong enough and the Bank of Japan isn’t able to support the yen, it may happen. If the USD isn’t able to stick at psychological highs, the pair will move to 111.26.