Forex weekly report

EUR/USD

EUR/USD initially tried to rally during the course of the session on Friday, but then fell apart and reached towards the 1.1050 level. That being the case, there is more than enough support below, and as a result we think that we will bounce given enough time. The market continues to go back and forth and it’s going to be difficult to hang onto a trade for any real length of time when it comes to the EUR/USD pair. Short-term volatility could offer scalping opportunities in both directions, but unless we are sure, we should stay away from here.

Forecast

EUR/USD dipped at the end of the week as the green-back rallied on extremely good jobs data. The pair closed the week at 1.1086 at the very bottom of its range seeing a loss of almost 0.8% for the week. In the coming week the Euro is expected to remain depressed and the dollar should climb as the Fed members turn hawkish. All indications is that the Euro should continue to drop this week.

GBP/USD

GBPUSD went back and forth during the course of the session on Friday, as we found the 1.30 level to be supportive. I believe that there is a significant amount of support below the 1.3 level that extends all the way down to the 1.28 handle. I have no doubt that given enough time we will probably break down below there but the candle for the Friday session suggests that we may have to bounce first before we do that so that we can build up enough momentum to finally break down.

Forecast

GBP/USD will continue with the downside bias price action signalling a two bar reversal bearish movement. Rejection at resistance area closed below the trend line and stochastic oscillator is currently at 50.0 levels. The pair closes below the rejection of trend line and there is clear indication of trend reversal shifting the momentum.

AUD/USD

AUD/USD went back and forth during the course of the session on Friday, as we got stronger than anticipated jobs numbers coming out of the United States. However, this is a market that has been rallying for some time now, and of course tends to follow the gold markets overall. The gold markets have been fairly bullish, so having said that I feel it’s only a matter of time before we continue going higher as the Australian dollar will benefit from that market. Pull-backs at this point in time should attract buyers.

Forecast

AUD/USD rallied late in the week to trade at 0.7617 but gains were limited by the climbing US dollar. New stimulus from the BOE held support commodity based currencies. The pair showed a weekly gain of 0.26% and is a strong buy in the week head with several events on the calendar including the RBNZ rate decision following the RBA rate drop last week. None of the four major banks will pass on the full interest rate cut to its customers following the Reserve Bank of Australia's decision to drop rates to a record low of 1.5 per cent.

USD/JPY

USD/JPY rallied a bit during the course of the session on Friday as the US jobs number came out stronger than anticipated. Because of this, looks like we could bounce a bit and you should also be aware the fact that we formed a hammer on the weekly chart. With that being the case, it is likely that we will eventually get some type of significant bounce in this market. Ultimately, this is a market that should continue to attract buyers based upon the fact that the Bank of Japan below is more than likely going to get involved if this keeps up to the downside.

Forecast

USD/JPY initially fell during the course of the week, but bounced enough to form a nice-looking hammer. This of course makes quite a bit of sense as the US jobs report was much stronger than anticipated. In fact, right above the top of the hammer should send this market looking for the 105 level. Given enough time, it’s very likely that the market will eventually continue to go higher as the 100 level below will attract the Bank of Japan, and possible intervention in this market or at least further quantitative easing.