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NZD/USD aims higher
Information is not investment advice
Market’s risk sentiment is quite positive, so commodity currencies are strengthening versus the USD. NZD/USD has been performing really well since the start of December as it managed to break above the line connecting 2018 and 2019 highs. In addition, last week it closed above the 50-week MA at 0.6580 despite testing lower levels. Moreover, the pair ended Thursday above 78.6% Fibo of the July-October decline at 0.6660. The natural target is at 0.6730 (the declining 100-week MA). The next resistance after that will be at 0.6790 (July high).
Support is at 0.6635 (December 13 high). A decline to 0.6565 (61.8% Fibo) should attract more buyers.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.