Last week closed out with pressure emerging on the Euro once again after the Federal Reserve confirmed what the market anticipated all along. With multiple rate hikes in the US now confirmed in 2022, EURUSD took center stage again and led the move lower for major currency pairs.
The Friday close in NY for Euro Dollar at 1.1150 has now confirmed a lower weekly top which now projects to 1.0830 with a time horizon at some point in April. This new weekly target now projects even lower than the monthly target of 1.0990.
Looking ahead, initial weekly dynamic resistance appears near 1.1215/25 and dynamic support near 1.1075/65.
Our daily volatility model is now looking over sold and we would be weary of entering new shorts below 1.1070 and allow this pair an opportunity to squeeze higher first.
Sterling also confirmed a lower high on the weekly charts with Friday’s NY close at 1.3400. The weekly chart projection for GBPUSD comes in lower at 1.3050, however we will wait for a daily close below 1.3315 first to give us more confidence that this trade will mirror EURUSD.
Looking ahead, initial weekly dynamic resistance appears near 1.3460/70 and dynamic support near 1.3335/25.
This weekly forecast would not be complete without coverage of the Euro Sterling pair, EURGBP. As we mentioned back on January 19th, EURGBP had parallels with EURUSD as it traded lower and this is still in place. With that said, EURGBP is now oversold on our weekly volatility model.
Initial weekly dynamic resistance appears at .8340/50 and dynamic support at .8285/75. We would be hesitant of initiating new short positions below .8270 for the week and allow the opportunity for this pair to squeeze higher first.