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Currency Trading Research

The Russia-Ukraine war on its outbreak created major volatility in Forex markets but recently this conflict has been ignored by financial markets. We are now at a critical stage of the war and could see an escalation that in our view, will have a major impact on the Forex markets. The impact of the war if it escalates will hurt European currencies and one in particular is vulnerable USD/PLN which is at the end of this article with levels to watch.

In terms of the outlook for AUD/USD, we have been bearish in recent articles the AUD has fallen but there is far more downside to come in our view...

USD/SEK is moving higher and has far more upside in our view. In our recent article, we expected the USD to bottom out at 10.20, we are now at 10.50 and could trade as high as 11.50 longer term in our view.

In terms of USD/CNH we have seen a correction but expect this to end with a big move to the upside as the Chinese economy continues to slow and the Peoples Bank of China allow the USD to rise on the Yuan.

In terms of GBP/USD we have the Bank of England this week and speculators are heavily long coming into the meeting and we expect a sell off.

We have been bearish in previous articles of EUR/USD and remain bearish – we expect far more downside for the reasons below:

In our article last week, we were looking for a sell-off in EUR/USD and we have seen prices move lower and have extended our downside target down to 1.0700...

In recent articles, we have been looking for GBP/USD, EUR/USD to fall and both pairs, have seen weakness and got low risk entries near the highs using our favorite tool sentiment tool in Forex the COT Net Trades Positions. This weeks report points to more weakness in both pairs.

The USD is in a big uptrend v the CNH and the recent pullback is a buy in our view. The Chinese economy continues to slow up and the Chinese will let their currency weaken to help boost exports USD/CNH is a good risk to reward long-term buy in our view.

China is the world's biggest commodity consumer and its economy is slowing which is bearish for all China-correlated currencies such as the AUD, NZD, and ZAR.

The USD has rallied this week can it continue its rally next week? The key event of the week will be the Fed meeting which is expected to trigger volatility in USD pairs. Our view of FOMC and the likely reaction in the markets is summarized below...

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