Start the week of May 24, 2021 with our Forex forecasts focused on major currency pairs here.
EUR / USD
The euro initially climbed higher in the weekend trading session, but returned gains above the 1.22 grip. In doing so, the market ended up forming a bit of a shooting star, showing some hesitation. In general, this is a market that I believe will continue to be very loud, but will also be a “buy-on-the-down” scenario as the US dollar continues to struggle. The 1.20 level below is a large, round, psychologically significant number that many people will pay attention to.
GBP / JPY
The British pound moved back and forth against the Japanese yen during the week as we reached the ¥ 155 level, but returned the gains to form a neutral candlestick. This tells me the market is very likely to pull back from here, but just like the euro, i think it is a market that will find many buyers below that are likely to get involved. Having said that, I think we should wait until we get to around ¥ 153 to start looking for an opportunity. Alternatively, if we break above the ¥ 155 level, it would be a major breakout and we could go much higher.
GBP / USD
The British pound rebounded significantly over the week to test the 1.42 grip but returned the gains to show signs of reluctance. In doing so, the market ended up forming a bit of a shooting star, suggesting that we might pull out. Moving back, I suspect that the buyers would look to the 1.40 level, an area that had been massive support as well as resistance. That being the case, I think that pullbacks should be seen as an opportunity to take advantage of what constitutes a very strong uptrend.
USD / CAD
The US dollar has rebounded significantly from the handle of 1.20, an area that has been important for a while, and eventually I think if we fall below that level it is likely that we could we collapse significantly enough to fetch much lower levels. In this case, we have to keep an eye out for it, but we ended up forming a bit of a hammer and it might cause a short term rebound. However, I’ll be careful not to get long.