Start the week of May 30, 2022 off right with our Forex forecast which focuses on various currency pairs.

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GBP/USD

The British pound rallied significantly last week to break above the 1.26 handle. However, we started to see signs of hesitation as we approached the end of the week, so I believe that this coming week may see more of a “fade the rally” type of attitude. 

If we were to break above the 1.27 level, then we may see a recovery rally to the 1.30 handle, but that would take some type of massive drop in the US dollar across the board. For what it is worth, the British pound does seem to be one of the stronger currencies out there, as it has performed well over the last two weeks.

EUR/USD

The euro saw a strong move to the upside for a majority of last week, but it reached close enough to the 1.08 level to see sellers come back in. This is an area that had served as previous support, and it is now offering resistance.

The market has been in a downtrend for quite some time, so it’s not a huge surprise to see that we rallied during the week. The 1.05 level could be a target for sellers. On the other hand, if we were to break above the 1.09 level, that move could open up fresh buying. I don’t see that happening, though, so more likely than not, we may see plenty of sellers.

AUD/USD

The Australian dollar rallied significantly last week to the 0.7150 area. The 0.72 level above serves as a significant amount of resistance on the daily charts, so this is going to be interesting to watch.

We have recently seen a nice bounce, but a lot of this momentum is going to come down to what’s happening with the bond markets. If the bond markets continue to lose yield, then it’s likely that the US dollar will lose some of its luster. Underneath, the 0.70 level should offer quite a bit of support.

CAD/JPY

The Canadian dollar pulled back last week, but it has found a bit of support underneath. Currently, the pair seems to be comfortable hanging around the JPY100 level, and this suggests that we are going to see a lot of back and forth movement. 

If we can turn around and take out the top of the candlestick from the previous week, then it’s likely that we could continue seeing such momentum. On the other hand, if the Canadian dollar drops down below the JPY98 level, we may see a pullback of a couple of hundred pips.