In this forex weekly outlook, we will discuss the fundamental and technical aspects of the financial market and possible trading opportunities.
We just have seen NFP go with a positive result that may build liquidity in the price. Moreover, the stimulus program and vaccine development may create a decent movement in most of the major currency pairs.
Let’s start the forex weekly analysis with the EURUSD
EURUSD
The European central bank will sit this week where we will see the recent recovery news after the pandemic.
However, if we see the recent retail sales and GDP data there are some negative impacts also pending. In that case, any dovish tone from ECB would bring a bearish pressure for EURUSD.
On the other hand, USD remained solid as soon as the better-than-expected NFP came. If other reports come in line with the NFP we may see a strong bearish pressure in the EURUSD.
The primary target for this week would be to test the 1.20 level from where a strong bearish pressure may come towards the 1.18 key level.
On the other hand, if the price movies to the 1.18 level are straight, we may see some strong bullish pressure.
AUDUSD
According to the recent statement, RBA said that the global economy is facing a recovery due to the implementation of the virus vaccine.
The economic recovery within Australia is going to be stronger than the expectation. The strong growth in employment with the decline of the unemployment rate at 6.4% is a strong achievement.
Moreover, RBA expected a continuation of this recovery in 2021 and 2022 while the GDP may return to the mid-2019 level at the middle of this year.
On the other hand, the wages and price may remain strong in the next few years where there is a possibility CPI inflation will increase temporarily due to the reversal of some COVID-19-related price reductions.
As of the RBA statement, the Australian economy may remain stronger in the coming days where any hawkish tone from Gov Lowe may create a bullish pressure on the AUDUSD price.
XAUUSD
The first week of March 2021 was devastating for Gold where the price broke below the $1700 psychological level.
Currently, investors are focusing on whether Gold will continue the bearish pressure or not.
The main reason behind the bearish pressure on Gold was the US 10 year treasury yield that made the US Dollar stronger weighing the gold. On the other hand, the fed Chair Jerome Powell told the largely ignored inflation and the rising yield might be the matter of consideration.
According to some prominent analysts, Powell’s failure to bring the bond yield back took away the luster of holding gold.
Therefore, the current short-term bullish pressure in the US Dollar is the reason for bringing the Gold price down.
Overall, the global financial market is worried about the sudden increase in treasury yield.
Therefore, any signs from Powell to provide hints about the prevention of the long end curve from rising higher would be positive for Gold.
As of now, the better-than-expected Non-Farm Payroll report may push the US Dollar index higher this week until it tests any significant support level.
Bitcoin
Bitcoin remained solid in terms of demand despite the positive nonfarm payroll report. more about the prices holding above the $40,000 levels for a long time. the bullish pressure in Bitcoin is supported by institutional investors who are keen to see the price above the 50,000 level again this year.
Therefore, there are some reasons to believe that Bitcoin will break the all-time high again in the middle of this year where the primary target would be a psychological $70,000 level, as reported by some prominent keep, two analysts.
This week’s price is trading below the $52,000 event level and if the daily close closes below this level we may expect the price to come down towards the $42,000 level.
However, a daily close above the $42,000 level would continue the bullish pressure towards the all-time high.
Over, the forex market may remain volatile this week and the upcoming Christmas may decrease the liquidity from the price.
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