Start the week of October 4, 2021 with our Forex forecast focusing on the major currency pairs here.
The yen is a popular asset during times of turbulence.
USD / JPY
The US dollar has experienced an absolute tear against the Japanese yen over the past two weeks and, due to the depletion, it is likely to eventually return to center stage. This is exactly what we have seen, but there are still a lot of buying interests below that will support this market. I think the ¥ 111 level is a natural place for this market to close from the previous week, and I think the “low” is closer to the ¥ 110 level. I like the idea of buying dips in the future.
EUR / USD
The euro fell sharply last week as the bond yield spread between the United States and Germany eventually grew too wide. That being said, we are desperately trying to hang on to the 1.16 level, but with this type of impulsive candlestick it makes sense that we continue to move lower. I predict rally fading will continue to be the way the market moves most often, with perhaps the 1.17 level above being a bit of the near term cap. If we can fall below the 1.15 level, the bottom will more than likely fall.
USD / CAD
The US dollar continues to rebound between the 1.25 level and the 1.28 level against the Canadian dollar. Last week told us that it was more likely than not that we would see a slight pullback, which would be an anti-US dollar move. As we see a strength in the US dollar against other currencies, oil has risen quite rapidly, and perhaps this could be one of the main drivers for the next step. Nonetheless, I would look for value hunters close to the 1.25 level even if we go down significantly. Over the next week or so, I fully anticipate that we will always be stuck in the same range.
NZD / USD
The New Zealand dollar has fallen for most of the past week against the US dollar, but as you can see we have recovered pretty well. The question now is whether or not the support will hold up. If we were to turn around and fall below the 0.68 level, it is likely that this market will collapse quite drastically. However, if we do end up turning around and breaking through the 0.70 level, it could be a bit of a turnaround. It will be interesting to see how this plays out, as this market is almost like a microcosm of what we see everywhere else: a lot of jerky behavior without any real clarity.