2023-05-22 • Updated
Here's the scoop: The Bank of England (BOE) is set to accelerate the pace at which it shrinks its balance sheet, according to one of its deputy governors. Currently, the BOE is unwinding about £20 billion of quantitative easing every three months. The goal is to reduce the stock by around £80 billion per year through active sales and maturing assets. Despite concerns that this process, known as quantitative tightening, could destabilize markets, it has been smooth sailing so far. The BOE aims to strike a balance between reducing the balance sheet and maintaining market liquidity. Remember, though, quantitative tightening is not the primary tool for tackling inflation—interest rates take the lead on that front. Stay tuned to see how this plays out in the forex market!
EURUSD - H4 Timeframe
Last week, during the PPI live market trading session in the telegram group, I mentioned that the US Dollar was gradually nearing a resistance level and could soon get weaker. This exactly played out and led to the price rejection from the pivot zone as seen in the chart above. However, I still uphold the overall bearish sentiment in the EURUSD market, and I have thus marked the likely supply zone price would react from. The highlighted supply zone has confluences from twin resistance trendlines, bearish moving averages array, as well as the 50-period moving average resistance.
Analyst’s Expectations:
Direction: Bearish
Target: 1.07766
Invalidation: 1.08752
EURCAD - Daily Timeframe
Whenever I see the moving averages arrayed in either an increasing or decreasing order as we have on the EURCAD chart above, I tend to simply look for trades in the direction of that order. Another notable confluence is the fact that price has made an initial reaction to the pivot zone just slightly below the 100-Day moving average. Based on these criteria, I would expect price to rise slightly higher, towards the 50-Day moving average, even higher.
Analyst’s Expectations:
Direction: Bullish
Target: 1.47064
Invalidation: 1.45239
EURJPY - H4 Timeframe
When I noticed that the 50-period moving average had crossed below the 100-period moving average on the EURJPY chart, my initial deduction was that price might be preparing for a reversal. The candlestick pattern formed by the reaction from the highlighted supply zone gave me the confirmation I needed. The candlestick pattern indicates that the buyers may have been overpowered at that supply zone by a new influx of sellers. Hence, my sentiment on EURJPY would remain bearish unless by some unexpected market stroke, price rises above the supply zone.
Analyst’s Expectations:
Direction: Bearish
Target: 147.402
Invalidation: 149.851
EURNZD - Daily Timeframe
If you’ve followed and digested my analysis up until this point, then you likely already guessed my sentiment on this one - Bullish! As you can see, the moving averages are arrayed in an increasing order which readily suggests a rising price action. Then, having a pivot zone that aligns perfectly with the 100-Day moving average and a support trendline adds the final piece of the puzzle. My initial target on this EURNZD trade is the 50-Day moving average.
Analyst’s Expectations:
Direction: Bullish
Target: 1.74317
Invalidation: 1.71437
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
You can access more of such trade ideas and prompt market updates on the telegram channel.
Canada's forthcoming Consumer Price Index (CPI) data, set for release on Tuesday, is projected to show a year-on-year decline in inflation to 3.2% for October from the previous 3.8%. This potential inflation dip might offer leeway for the Bank of Canada (BoC) to maintain its overnight rate target at 5.0% in the...
Speculation persists regarding the Bank of Japan's potential departure from negative interest rates, yet the USD/JPY maintains its position within a 150–152 range for seven consecutive sessions. Caution is warranted due to a weaker-than-expected Q3 GDP, a slump in imports, and...
The U.S. dollar experienced significant losses as October's inflation data hinted at the Federal Reserve concluding interest rate hikes. The dollar index dropped 1.50% to its lowest since September. October's consumer price index (CPI) showed a ...
The EUR/USD pair is making gains, approaching multi-month highs around 1.0960, driven by a weakened USD and Christine Lagarde's somewhat hawkish remarks before the European Parliament. Minor housing data from the U.S., specifically New Home Sales for October, came in below expectations but didn't significantly impact the pair. Lagarde, President of the...
Global equities on Wall Street experienced a mixed session following the Thanksgiving holiday, heading for the most significant one-month rally since November 2020. MSCI's global shares index slightly eased but was still on track for an 8.5% monthly gain, fueled by growing investor confidence that U.S. interest rates...
Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
|
