Forex Market Outlook: Key Insights on USD Strength, Euro and Yen Trends & Opportunities

As we move into the latter half of November, the forex market is buzzing with opportunities, and I’m here to break it all down for you. The US dollar continues to dominate since October, driven by political shifts and strong economic indicators. It's an exciting time in the currency markets, so let’s dive into what’s happening this week and what lies ahead.  

The Week Ahead: Key Events and Data to Watch

While the early part of the week looks relatively quiet, although the markets promise some action. Here’s what’s on my radar:  

• Tuesday: CPI data from Europe.  
• Wednesday: UK CPI data.  
• Thursday and Friday: Packed with UK core retail sales, German GDP, German services PMI, ECB President Christine Lagarde’s speech, and multiple PMI readings across Europe and the UK.  

These events could stir volatility, especially for pairs like EUR/USD and GBP/USD. While we don’t have central bank rate decisions this week, December promises significant developments, with the ECB meeting on December 12 and the FOMC on December 18.  

Currency Spotlight: EUR/USD and USD/JPY

Two currency pairs stand out for traders this week:  

The euro has been testing key support levels, briefly dipping below 1.0500. I see 1.0500 as a potential bounce-back point, but I remain bearish. My strategy is to wait for market corrections before adding to my short positions, with a target of 1.0400.  

The Japanese yen has been volatile, climbing from 140 in early October to nearly 155. While the Bank of Japan’s reluctance to raise rates continues to weigh on the yen, I’m targeting a longer-term level of 170 for USD/JPY. I believe the opportunity for a rate hike has passed, and the yen’s weakness will persist, driven by the US dollar’s strength.  

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