Forex Weekly Outlook- 31 May 2021 to 04 June, 2021
The forex market is shifting the trading environment from one month to another month. Therefore we may expect a lot of volatility and counter pressure during the week.
Moreover among fundamental releases there is any important not prepared report on Friday that may set a direction for the price. Another way is the price may experience extreme volatility this month and we are expecting a stable and sustainable growth from this week.
Let’s start the forex weekly analysis with the EUR/USD:
The EUR/USD price became extremely volatile at the 1.22 key resistance level from where we are expecting a solid move.
The price already showed a decent bearish rejection last Friday with support from the dynamic 20 EMA on the daily chart. However, the price failed to show a strong bullish momentum at the 1.22 resistance area that creates the bullish possibility.
In this market condition, the price has a higher possibility of continuing the bullish pressure with the target of 1.2380 level. Conversely, if the price comes below the dynamic 20 EMA with a bearish daily close we may expect further bearish pressure in the coming days.
GBPUSD is moving within a range of 1.4236 to 1.4100 levels. Currently, the price is almost to the middle of this zone. Therefore, we remain on the sideline for this pair and wait for a solid breakout above or below this zone.
Considering the breakout, we are at the monthly shifting phase where the price has a higher possibility of showing trend reversal momentum. In this context any bearish daily close below the 1.4100 support level may increase the bearish possibility to the price.
USD/JPY remained corrective at the 109.69 resistance level which is a sign of a price reversal. However, the most recent bullish pressure remained strong that created a gap between the price and dynamic 20 EMA.
Therefore, as long as the price is trading below the swing high of last week, we may expect a bearish trend towards 108.00 level in the coming weeks.
The AUD/USD moved higher with an impulsive bullish pressure and managed to hold the price above the 0.7700 level. Currently, the price is facing a critical zone at the 100-day simple moving average. Therefore we may need to wait for an appropriate price action to see.
Moreover, the price managed to have a daily close below the dynamic level of 20 EMA. As a result, the price has a higher possibility to move lower in the coming days.
Overall, this week we may have volatility in the price due to the monthly shift and any sign of a weaker-than-expected US report might increase the current volatility.