Weekly Forex Forecast: What to Watch This Week

As we step into another dynamic week in the forex market, traders should keep an eye on several key events and indicators that could influence currency movements. Here’s a breakdown of what to watch this week:

1. Economic Data Releases

U.S. Non-Farm Payrolls (NFP):

  • One of the most significant indicators of U.S. economic health.
  • A strong NFP report could bolster the USD, while a weak report might lead to a sell-off.

Eurozone CPI Data:

  • Inflation figures from the Eurozone will provide insights into the ECB’s future policy decisions.
  • Higher inflation may prompt a hawkish stance, strengthening the EUR.

China’s Manufacturing PMI:

  • Reflects the economic health of China, impacting currencies like AUD and NZD due to their trade relationships with China.

2. Central Bank Announcements

Federal Reserve Meeting Minutes:

  • Traders will look for clues on the Fed’s next move regarding interest rates and monetary policy.
  • Hawkish minutes could support the USD, while dovish tones may lead to weakness.

Bank of England (BoE) Governor Speech:

  • Any hints on rate changes or economic outlook can significantly impact GBP pairs.

3. Geopolitical Events

U.S.-China Trade Relations:

  • Ongoing trade talks or conflicts can create volatility, particularly affecting USD, CNY, and related currencies.

European Political Developments:

  • Brexit updates or political instability in the Eurozone could cause fluctuations in EUR and GBP pairs.

4. Technical Levels to Watch

EUR/USD:

  • Key resistance at 1.10 and support at 1.0850.
  • A break above or below these levels could signal further directional movement.

USD/JPY:

  • Watch for support at 130.00 and resistance at 135.00.
  • These levels could define the next trend for the pair.

5. Commodity Prices

Oil Prices:

  • Fluctuations in oil prices can impact currencies of oil-exporting countries like CAD, NOK, and RUB.
  • Look for any OPEC announcements or changes in supply-demand dynamics.

Gold Prices:

  • Often inversely correlated with USD.
  • Rising gold prices might indicate a weaker USD and vice versa.
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