Start the week of June 20, 2022 with our Forex forecast focusing on major currency pairs here.
The US dollar initially plunged against the Japanese yen during the past week, but as you can see, we have turned around quite drastically to close out the week near the ¥135 level. At this point, if and when we finally leave the ¥135 level in the rearview mirror, it will become yet another opportunity to “buy-and-hold” this pair. It’s at this point in time that it should be thought of as value, as the Bank of Japan has reiterated its goal of keeping interest rates down. There is no fundamental reason for this trend to change.
The British pound did very similar action against the Japanese yen during the trading week, plunging to the ¥160 level before finding buyers and turning around again. By doing so, the market looks likely to continue plowing higher, eventually threatening the “double top” near the ¥168.50 level. If we can break above there, then it’s likely that this pair will become more “buy-and-hold” than anything else.
At this point, any dip in this pair should be thought of as a buying opportunity as it is so bullish, and it does not look like it’s changing anytime soon. Ultimately, this is a market that could go looking to the ¥170 level.
The euro was all over the place during the week, which is indicative of the markets in general. Volatility continues to be a major issue with most major asset classes, and I just don’t see this ending. Because of this, I think this market continues to be neutral with a downward bias, so if you are a range-bound short-term trader, you are looking for rallies to sell. I would not look for a massive move in this market, but that’s nothing new for the euro as it is one of the choppy and worst trading pairs out there.
The British pound had a wild week, slicing through the 1.20 level before turning around. The Bank of England press conference caused chaos, but it does look like we are at least trying to do some type of recovery for a base-building exercise here. Nonetheless, I still like feeding rallies and I think that it is probably only a matter of time before the sellers return, especially the closer we get to the 1.25 handle.