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EUR/USD, USD/CAD Weekly Market Analysis

somrat4030

Well-known member

Jan-28, 2022, EUR/USD, USD/CAD Weekly Market Analysis, By Forex Forum.​


Currency pairs weekly market analysis

While USD is extending its rally, we can see EURUSD even lower, but still trading in the middle of wave 3, so be aware of more downside pressure in upcoming days, just watch out for an intraday pullback.​


The Euro has broken down rather significantly during the course of the trading session on Thursday as we continue to see a lot of negativity out there. The 1.12 level being broken through is a very significant turn of events, and as a result it is likely that we could go looking towards the 1.10 level underneath. All things being equal, if the market does bounce from here, it is very likely that we could see plenty of selling based upon the fact that the 1.1225 level had been significant support previously and should be resistance going forward.

The 1.12 level could offer a bit of selling pressure due to the fact that we had bounced from there previously as well, and any type of exhaustion that shows up near that area should be sold into from everything I see. The size of the candlestick is a very negative as well, and therefore it is likely that the markets will find some type of continuation at this point in time. The fact that we are closing towards the very bottom of the range typically means there is a bit of follow-through coming so keep that in mind.

On the other hand, Despite a heavy slate of Eurozone data out during the European morning​

It has been a rather tame trading day for EUR/JPY, with the pair swinging within 128.40-128.80ish ranges, well within this week's 100 pip, 128.20-129.20ish range. Right now, the pair is trading just to the north of the 128.50 mark and if roughly flat on the session. Where last week was a story of safe-haven demand driving FX market flows, thus pushing EUR/USD lower from the 130s, this week was a story of choppiness/indecisiveness, hence the mixed trading conditions for EUR/JPY.

Fed hawkishness in the middle of the week turned the focus in FX markets away from risk appetite back towards central banks and policy divergence.

Source: fxstreet.com/news/

Elsewhere, The USDCAD has been up 4 of 5 days this week.​
The low was made on Monday at 1.2553, and that level was tested again ahead of the Bank of Canada decision on Wednesday when the low reached 1.2558 (just 5 pips from the low).

The BOC kept rates unchanged. The market was leaning -70/30 - in favor of a hike. As a result, the CAD sold off (higher USDCAD). Technically, the price also based near the 100 hour MA before moving higher.

The more hawkish Powell later that day, sent US yields higher in the short term, sending the USD and the pair even higher.

Today, the high for the week was reached at 1.27958. The price has wandered lower in the North American session as stocks rebounded and yields started to come down a bit as well taking some pressure off of the dollar buying. However, the low self or your 1.2747 has stalled against the high from yesterday and the early Asian high near the same level. There is also a fairly steep trendline just above the level which may also be in play for dip buyers.

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