In this video update, we identify the potential trending forex pair of the week.
We do this by analyzing the strength and weakness of the currencies.
Combining this with technical analysis to identify trend trading opportunities.
Watch the video to find out more…
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we will identify the week’s trending market using strength and weakness analysis.
You can see here, on the strength and weakness table, in the Forex Market Outlook, we identified that the Swiss Franc was the weakest currency last week. It dropped by three places and is now heading towards the minus six number. Meanwhile, CAD was one of the strongest.
Now, when we look at this chart, you’ll see that these two numbers are different because the market is trending to the upside.
If I go to that chart now, you can see the markets make nice higher highs and higher lows. We can see when the price came and retested this structure down here, around 0.6980s, the market found some support, changed the trend, and we had that higher high pattern come in.
Once we see that, we look for a higher low to come in place at previous structure resistance, turning into support, and price continues to make that trend. Again, we’re looking for the price to come back into the previous structure for long positions on our lower timeframes.
If that strength and weakness is going to continue this week, we should also expect this trend to continue.
Looking at the four-hour timeframe here, we can see that the price is currently in a retracement phase, coming back down towards this previous structure level here, around 0.7075.
We can determine from the strength and weakness analysis that the price should be trending to the upside. The market is making those higher highs. Where do we want to be buyers? We want to be at the previous structure resistance, turning into possible support.
How can we get involved with that? If the price comes down into this area, we can look for the market to find some change in cycle patterns on our lower timeframe. We can look for double bottoms, and we can also look for inverse head and shoulders.
But, ultimately, we want the market on the lower timeframe to provide us with a double bottom, a break to the upside, retested, then continue up.
We want to see that when we look at trending environments because when the market is in these impulses and retracement phases on lower timeframes, there’ll be trends within these moves.
Typically, on a four-hour, if you go to your 15-minute timeframe, you’ll see the market trending to the upside. On the pullbacks, you’ll see the 15-minute timeframe trending down back into a key area of support and so on. When the price gets back down into this area, look for those change in cycle patterns. It’s an early sign that the impulse move is about to continue. Try and trade back up into previous structure highs.
I hope you enjoyed this video update, and I’ll speak to you in the next one.
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