Start the week of Aug. 29, 2022 off right with our Forex forecast focusing on major currency pairs.

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EUR/USD

The EUR/USD currency pair had gone back and forth during the week, as we continued to hang around the parity level. At this point, it looks like the pair have been taking a bit of a pause, but I think we have to look at this through the lens of “fading short-term rallies” going forward. 

The market has gotten down to this level rather quickly, but now that Jerome Powell has reiterated the hawkish attitude of the Federal Reserve, it’s likely that we will continue to see the US dollar reign supreme. I like fading rallies, especially near the 1.03 level, if we manage to get all the way up there.

GBP/USD

The GBP/USD currency pair initially tried to rally during the trading week, but it gave back gains as we continued seeing a lot of negativity when it comes to the British pound, as the Bank of England has already stated that the United Kingdom is going into a recession.

Because of this, the market is likely to continue fading rallies, and the pound may be even worse off than the euro. If we were to break above the 1.20 level, then you might be able to make an argument for something else. Until then, this looks very bearish to me.

USD/JPY

The USD/JPY currency pair had pulled back slightly to kick off the week, but then it ended up rallying yet again. It looks as though the pair may eventually try to break above the recent highs, perhaps breaking through the JPY140 level.

The JPY132 level underneath continued to be significant support, so I do like the idea of any pullback being bought into. If the Bank of Japan continues to fight rising interest rates, this pair would likely continue to be a “one-way trade.”

AUD/USD

The AUD/USD pair initially tried to rally during the week, but it gave back a lot of the gains at the 0.70 level. The market has been seeing a lot of volatility, and a lot of resistance at the 0.70 level. If we can break above that level, then we could go looking toward the 50-week EMA. However, it looks more likely that we are going to approach the lows again after the Federal Reserve has spoken.

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