EUR/USD
The EUR/USD has spent the better part of the last month rising, as we head into 2023. I would expect more of that behavior, but keep in mind that the 1.08 level could cause a bit of a problem. Because of this, the market is likely to remain a bit skittish, and of course, with the jobs number at the end of the week, that will have a major influence on where we go next. If we can break above the 1.08 level, then it’s a very bullish sign that could send this market to the 1.10 level. On the other hand, if we break down below the 1.06 level, then we will almost certainly try to get back down to the 1.04 level.
GBP/USD
The GBP/USD had ever so slightly positive week to in 2022 but looks as if we are still a bit heavy at this point. If we can break down below the bottom of the candlestick for the previous week, it’s possible that the British pound will finally break through the 1.20 level, dropping down to the 1.15 love over the next several weeks. Alternatively, we could see a slightly positive week that rallies toward the 1.22 level, keep in mind we have the jobs number on Friday and that will probably have a lot to do with where we go next as well. I believe that the British pound is probably going to continue to be hesitant at best.
USD/JPY
The USD/JPY initially tried to rally for the week but seems to be struggling as we continue to see the Japanese yen recover. After the Bank of Japan decided to allow its interest rates to rise all the way to the 50 basis points level, traders started to speculate that perhaps the Bank of Japan will have to allow those rates to rise even further, perhaps even raising rates once or twice during the year. We will have to wait to see whether or not that’s true, but if we break down below the bottom of the previous week, we more likely than not will go looking to the ¥127.50 level.
AUD/USD
The AUD/USD has rallied a bit during the week, reaching toward the top of the consolidation area that we have been in, and sitting just below the 50-Week EMA level. I think at this point we are trying to figure out whether or not we are going to break above the 0.69 level, and threaten the 0.70 level. It certainly looks as if we are going to try to make that happen, but don’t be surprised at all if we pulled back a bit this week, as we continue to consolidate and wait for more volume.
USD/CHF
The USD/CHF has fallen again this past week, as we continue to threaten the 0.092 level. This is an area that’s been supported multiple times in the past, so quite frankly if the US dollar is going to save itself, it’s going to be right here. If we can break above the highs of the last couple of weeks, then it looks like the dollar takes off, perhaps reaching the 0.95 level, maybe even parity over the longer term. That being said, it looks like US dollars are in a little bit of trouble against multiple currencies, although this one is most certainly sitting at a major support region. Breaking down below the 0.91 level would be very negative for the greenback.
NZD/USD
The NZD/USD had a positive week as we continue to hang around the 0.63 area. The New Zealand dollar has got a little bit of a boost, but we need to break above the 0.65 level to truly take off to the upside. In the short term, keep in mind that volume is going to be very anemic, so it’s likely that we won’t have much in the way of a big move, as we continue to see a lot of questions about global growth, which of course New Zealand is highly susceptible to. We are a little overdone, so it’ll be interesting to see if we can keep up the upward momentum.
USD/CAD
The USD/CAD has pulled back slightly during the week, but quite frankly I think at this point in time we continue to see oil struggle, due to a lack of global demand. As long as that is going to be the case, the Canadian dollar is probably susceptible to the greenback’s strength. It looks to me like the 1.35 level does attract a lot of attention, it was an area of major resistance in the past, so it does make a certain amount of sense that it has market memory right now. That being said, I’m not looking for huge moves.
EUR/AUD
The EUR/AUD had a slightly negative week against the Australian dollar, as we continue to hang around the 1.58 region. This is a market that is at a major crossroads, so while it’s difficult to make a prediction, you should be aware of the fact that if we break above the 1.60 level, the Euro could take off. On the other hand, if we break down below the 1.55 level, we could see this market drop a couple of handles. This is on my watchlist, but right now it’s a 50-50 shot.
