As investors await the new week, there is only one thing on everyone’s mind – how will the new week be given the banking condition in the US and the economic data from the UK expected to see further financial stress?
In addition, the inflation rate has been persistent worldwide, with dovish central banks starting to record rates and hawkish ones seeing immense pressure from the same rate hikes. Either way, the next week is expected to be an interesting one.
The Bank of England, or the BoE, is expected to raise interest rates by 25bp, while the Fed remains on the line with the rate hikes starting to take their toll on the banks. So here are a couple of predictions for the foreign markets next week.
The EUR/USD
The pair has rebounded from the weekly lows at the 1.0606 prices, and according to the price analysis, the pair could break even and hit the 1.0700 level. The pair’s long-term target remains at 1.1042, but the pair has to break some key resistance levels hovering at the 1.0900 level.
The Dollar Index
The DXY is trading at the 103.00 low and is remaining in the oversold territory. In the next week, the DXY will be targeting the 104.00 level and also targeting the 105.00 level. The DXY is trying to create new averages above the current price; however, the trend remains downward. If the DXY drops below the current price, the index will plummet to the support levels found at 102.90, ensuring it trades above the 100.00s.
The GBP/USD
The Sterling will see a busy week, with the BoE and Fed rate decisions expected to provide investors with more insight. If the pair breaks above the current 1.2157, the pair may skyrocket to 1.2700, with the toughest resistance level at the 1.2500 level.
JPY Cross Pairs
Analysts expect the bigger currencies to have a positive Monday against the JPY, with GBP/JPY hitting the 156.00 level and the EUR/JPY expected to see a sharp 0.95% uptick. However, the JPY’s dovish stance is already taking a toll, with the country’s economy seeing increased inflation pressures.
AUD/USD
The pair’s long-term goal remains consolidated at 0.7083, clearing the first hurdle above 0.6736 and then sprinting for 0.6952.
GBP/AUD
The pair is trading at 1.680, and the new week will see the currency target 1.7900 and sprint for the 1.8100 psychological level.
EUR/CAD and The GBP/CAD
The GBP is currently trading at 1.6596 after the 1.6627 opened last Monday. The two pairs are staying neutral, and according to analysts, the pair will likely not travel far from this point. The movement of economic data in the last two weeks on the Canadian front has seen the price pressures stable in the country.
Conclusion
The next week will be very busy, and as the world continues to fight with the banking crisis in the US and stubborn inflation in the US, the next week could be full of both negative and positive surprises. The rate decisions by the Fed and BoE will provide further clarity, but at the moment, investors are staying cautious as they wait for further direction in the global market.