The foreign exchange market is one of the most dynamic and volatile financial markets in the world. Traders and investors analyze various technical and fundamental indicators to predict the movement of major currency pairs. This article provides an in-depth analysis of the current market conditions and predicts the potential movements of major currency pairs for the next week.
DXY and USD/JPY
Last week, DXY became overbought at 105.00s and oversold at 103.90s, reaching a high of 105.88 and a low of 104.12. However, DXY remains severely overbought with limited upside potential and could potentially trade in the 103.00s. Meanwhile, USD/JPY broke the 135.45 line and traded to 137.90 highs. Despite being deeply overbought at 137.00s, it was allowed to travel higher due to DXY’s overbought status. Traders could make a profitable trade by going long on USD/JPY from vital 135.45 to just under 137.00s and then short at the highs.
EUR/USD and GBP/USD
EUR/USD is currently trading around the vital 1.0559 level, and the next level below is 1.0519. Limited upside potential exists for DXY, while limited downside exists for EUR. Traders could expect EUR/USD to trade twice the value of DXY next week. On the other hand, GBP/USD is oversold from vital 1.1992 and 1.2500s and could potentially trade to the low 1.2100s next week, while EUR/USD could reach 1.0700s.
GBP/JPY shorts at low 164.00s targets low 163.00s until the break at 162.68. Last week, GBP/JPY traded at 163.84 to a low of 163.00 before the break materialized at 162.68 and traded to 161.60 lows. Higher for GBP/JPY must clear 162.62. GBP/JPY is inching closer to the 159.21 targets, which means all JPY cross pairs could trade lower for another 300 pips.
AUD/USD and NZD/USD
Deeply oversold AUD/USD could potentially trade in the middle 0.6700s next week, while NZD/USD could reach highs of 0.6181 and 0.6199.
Forex analysis is a crucial tool for traders and investors to predict the potential movements of major currency pairs. Based on the current market conditions and technical indicators, traders could potentially make profitable trades by going long or short on specific currency pairs. However, it’s important to remember that the forex market is volatile and unpredictable, and traders should always practice proper risk management strategies.