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Trade idea for GBP/CAD
Information is not investment advice
Last week GBP/CAD tried to rise to the 200-week MA in the 1.7750 area but then turned down and closed around 1.7460, below the highs of December and January. The weekly pivot point is at 1.7535, and as long as the pound is trading below this level, it will remain under pressure.
This week trading started with a bearish gap. The situation is not surprising: a lot of important events await the British pound, so volatility will be elevated. GBP/CAD met the resistance line and turned down. The pair will be under pressure to get to the lower levels, closer to the daily MAs. The levels to watch on the downside include 1.7345 and 1.7230.
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.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?