#EURUSD,#GBPUSD: Weekly Forecast 16- 22 April 2023

EUR/USD: Weekly Forecast 16th April - 22th April

The EUR/USD went into the weekend within sight of its highs attained early on Friday, and continues to find speculative buying persists with the currency pair.

The EUR/USD will start the week near the 1.09930 mark, which is a price that has last seen sustained values in March and April of 2022. Yes, the EUR/USD did trade above the 1.10000 level briefly in early February of this year, and this past Friday the currency pair did trade near a high of 1.10800 before faltering. However, sustained prices near these levels have not been accomplished for over a year and speculators who believe the EUR/USD can go higher are certainly looking at their long-term charts to gain perspectives.

EUR/USD Battling Highs is a Solid Trend but Concerns Abound

The ability to climb over 1.10000 on Friday and move even higher was significant. However, traders need to remain realistic, if the reversal lower didn’t cause concern then it should be remembered the threat of more interest rate hikes from the U.S Fed lurks. The U.S central bank is almost guaranteed to hike by another quarter of a point in early May, and concerns are legitimate that another 0.25% in June could follow. This may produce some shadows over the EUR/USD this week as behavioral sentiment reacts to the outlooks of financial institutions.

There will not be a significant amount of U.S. economic data this week or from Europe. Inflation concerns still continue to cause alarm in both places and while the EUR/USD has certainly seen a trend upwards continue to produce rather solid results, day traders should remain vigilant for volatility and the potential for a reversal lower.

Outlook will Stir the EUR/USD this Week for Day Traders

• The ability of the EUR/USD to reach highs on Friday not seen in over a year is enticing, but the reversal lower before going into the weekend is a caution sign.
• The EUR/USD may produce choppiness this week as behavioral sentiment is affected by voices coming from European and American central bankers.
• The EUR/USD could also be affected by market sentiment created by results from the major equity Indices this week as their results are contemplated regarding economic outlooks.

EUR/USD Weekly Outlook:

The speculative price range for EUR/USD is 1.08810 to 1.10960

Sustained trading over the 1.09000 level last week was important and traders may look at this level as a strong support ratio. Having finished the week closer to the 1.10000 ratios, day traders may be tempted to aim for the higher levels seen early this past Friday, this before a stumble lower was produced before going into the weekend.

However, traders who are cautious need to monitor the trading of the EUR/USD for the first few hours on Monday before jumping into the water to pursue the currency pair. The trend of the EUR/USD has certainly been higher, but contrarians may believe the Forex pair has been overbought in the short term. If the 1.09500 begins to see a challenge lower, this could set off some alarm bells and cause the EUR/USD to move towards the 1.09300 to 1.09000 mark.

A move below 1.09000 may be viewed as being overdone and create more buying, however. The ability of the EUR/USD to climb cannot be discounted and traders with a longer time frame may remain confident in the currency pair’s track upwards. However, day traders must be prepared for a constant battle of cyclical reversals and trade with strict risk-taking tools always ready. The coming week for the EUR/USD is likely to produce a test of its known range and choppiness may persist near-term.

GBP/USD: Weekly Forecast 16th April - 22th April

The GBP/USD went into the weekend finishing around values it essentially began the week with as the mathematical mean proved solid and traders expressed nervousness.

The GBP/USD will begin trading this week near the 1.24125 mark. Traders who were on long vacations and were not paying too much attention to the GBP/USD during their Easter holidays may look at the value and assume the currency pair had a calm quiet week. However, this was not the case and the GBP/USD produced violent trading as its range provided speculators with a wide price disparity.

U.S. data was Weaker than Expected but Friday the USD became Stronger as the Day Progressed

Having started last week essentially where the GBP/USD finished allows speculators once again to test their perceptions. The GBP/USD did reach a high of nearly 1.25485 on Friday before it sank like a stone. The low that the GBP/USD closed at going into the weekend was near Wednesday’s and Monday’s depths. So what happened? U.S inflation data came in weaker than expected and this gave the GBP/USD a seeming boost upwards. On Friday the Retail Sales numbers also came in weaker than expected. So what went wrong?

The results from Wednesday and Thursday’s inflation statistics from the U.S., and Friday’s Retail numbers may have been believed to help solidify the climb by the GBP/USD. However, Consumer Sentiment numbers from the U.S. came in stronger than expected also on Friday. And then chatter could be heard among analysts who commented about the high price of Crude Oil once again, which in their minds may be a reason inflation will remain stubborn in the mid-term. Add to this volatile mixture comments which came from various U.S Federal Reserve officials that inflation remains problematic and additional interest rate hikes may be needed also at the end of last week, and suddenly there was enough fuel to ignite USD strength, meaning a selloff of the GBP/USD occurred.

U.S Federal Reserve Interest Rate Hike almost certain in Early May

• The U.S. Fed is almost guaranteed to increase the Federal Funds Rate by another 0.25% in early May, but folks this was already known by most traders.
• It is the realization the Fed may stay aggressive with another hike in June which likely has caused some sudden strength in the USD to happen again.
• Inflation data did show signs of weakening via U.S. reporting, but concern about high energy prices continues to cause worries.

Traders of the GBP/USD may have to get used to the current price range and use their technical perceptions to pursue wagering. While it appears clear many financial houses believe the GBP/USD has reason to be higher, this is because of challenges above the 1.25000 level in the past two weeks. It is also apparent there are enough shadows lurking which are causing uneasy behavioral sentiment still and selloffs. Economic data will be important this coming week, but it is likely financial institutions will be trying to get a clear picture regarding their outlooks. This may make things difficult for day traders this coming week if they are not careful.

GBP/USD Weekly Outlook:

The speculative price range for GBP/USD is 1.23240 to 1.25910

Having finished the week near its lows, the GBP/USD opening on Monday will be intriguing. Speculators should monitor early trading to try and get a handle on where behavioral sentiment is leaning. Having shown the ability to produce a rather wicked reversal before going into the weekend, if selling pressure persists early this week, the GBP/USD may find support levels being challenged and vulnerable. A sustained fall below the 1.24000 mark could be a short-term bearish signal and may mean further downside pressure is going to be seen. Yet, it is important to note that support levels near 1.23500 may be considered a solid place to look for reversals higher by some financial institutions.

Day traders who were pursuing long GBP/USD positions on Friday and got burned by the sudden rush lower were certainly reminded that stop-loss protection is vital when betting. The current price range of the GBP/USD between 1.24000 and 1.25000 may prove to be a rather solid betting range this week as financial houses look for equilibrium. Pursuit of the GBP/USD should be done with careful consideration of technical charts while keeping an ear on the potential of developing news to stir the broad market.

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