Forex Trading Weekly Forecast 05.10.2013
The US Dollar finally showed signs of life and surged against major forex counterparts even as the S&P 500 finished at record-peaks. The safe-haven USD may rally further as a sharp gains in FX volatility prices suggest the Dollar breakdout is the “real deal”.
Though EURUSD took a tumble this past week – largely on the incredible strength of the US dollar – the Euro individually performed well through the period. That vigor may not hold next week though ...
Gold continued its descent this week with the precious metal down nearly 3% to trade around $1430 at the close of trade in New York on Friday. Persistent strength in equities accompanied by a massive rally in the US dollar have continued to weigh on demand for the yellow metal with recent price action suggesting further loss are likely in the medium-term.
In a week when the Japanese Yen lost -2.66% to the US Dollar, it speaks to the shifting dynamics of risk appetite that the worst performing currency of 2013 was not the worst performing major currency this week!
The British Pound threatened the bullish trend dating back to March as the GBPUSD tumbled to a fresh monthly low of 1.5313, but the selloff may be short-lived should the Bank of Englandstrike an improved outlook for the U.K. Indeed, the BoE’s inflation report highlights the biggest event risk for the following week, and the quarterly update may dampen bets for more quantitative easing as the central bank sees a slow but sustainable recovery in Britain.
Last week brought what appears to be a critical trend change in the Australian Dollar’s path against its US namesake. However, prices will have a hard time sustaining aggressive near-term bearish momentum without a fundamental catalyst.
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Written by the DailyFX Research Team. To sign up for a weekly e-mail with our currency outlooks, go to our page for forex news delivered to your inbox.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.