Weekly Forex Forecast: EUR/USD, NZD/USD, USD/CAD, SPX500
Original article by Justin Bennett on ForexFactory
In the ever-shifting landscape of the foreign exchange (Forex) market, traders seek insights into potential price movements to make informed decisions. Justin Bennett’s weekly Forex outlook for EUR/USD, NZD/USD, USD/CAD, and SPX500 provides valuable analysis and key levels to monitor. This comprehensive breakdown expands on the original article hosted on ForexFactory and offers a deeper dive into charts, technical indicators, and key market catalysts currently influencing price action.
Let’s analyze each market in greater detail.
EUR/USD: At a Tipping Point
EUR/USD had a volatile week, consolidating around the 1.0700 level after showing signs of bearish pressure for the past few weeks. Currently, key levels and patterns are emerging, suggesting that the pair could be facing a breakout scenario.
Technical Outlook:
– After the recent breakdown from an ascending trend line, EUR/USD has been struggling to regain a bullish footing.
– Resistance is seen around the 1.0780 level, which coincides with a descending trend line from the March 2024 high.
– On the downside, 1.0650 remains a pivotal support, as price action rebounded from this zone on multiple occasions.
– A daily close above 1.0780 would open the door for a potential rally toward 1.0880 and then possibly the 1.0960 area.
– Conversely, a breakdown below 1.0650 would expose the pair to a retest of the 1.0600 level and potentially lower, possibly to 1.0500.
Fundamental Considerations:
– Recent data from the Eurozone has painted a mixed picture, with inflation stabilizing but core economic indicators such as PMI and wage growth showing weakness.
– The market continues to price in potential rate cuts from the European Central Bank (ECB) later in the year, which could weigh on the euro.
– Meanwhile, the US dollar remains supported by high Treasury yields and investors repricing expectations around the Federal Reserve’s monetary policy.
Key Levels to Watch:
– Resistance: 1.0780, 1.0880, 1.0960
– Support: 1.0650, 1.0600, 1.0500
Setups to Consider:
– Bullish breakout traders may look for a confirmed daily close above 1.0780 to signal further upside potential.
– Bears may focus on short entries if EUR/USD fails to hold above 1.0650 or rejects the 1.0780 resistance zone.
NZD/USD: Bearish Breakdown Risks Accelerate
NZD/USD ended the week under pressure, breaking below a key trend line support and showing signs of follow-through momentum from bears.
Technical Analysis:
– Price broke a long-standing ascending trend line from the October 2023 low, suggesting that the bullish structure may be unraveling.
– The key breakdown occurred near the 0.6050 area, which should now act as potential resistance.
– A further drop could send the price down toward 0.5900, the next key support zone from November 2023 lows.
– If 0.5900 fails to hold, the next immediate demand zone lies around 0.5820 and potentially 0.5770 below that.
– Immediate resistance lies at 0.6050 followed by 0.6120, areas where sellers could re-enter the market if price attempts a pullback.
Macro Backdrop:
– The Reserve Bank of New Zealand (RBNZ) held rates steady at its recent meeting but maintained a relatively neutral stance, prompting a bearish reaction in the kiwi.
– New Zealand economic data has been soft, with GDP slowing and inflation pressures easing, leading many analysts to believe that the RBNZ will likely shift to a dovish tone in upcoming months.
– Coupled with
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