All posts

FOREX Chart Of The Day: USD Weakness Resumes

The USD weakness has resumed, but how long will it last?
 
In this video, we identify the key levels to watch and what could happen next.
 
Watch the video to learn more…

Hi, and welcome to today’s Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.

Practice trading with a demo account
In this video, we’re going to go through the US Dollar as the greenback continues to fall.

We were expecting a little bit of buying pressure in going into this week because the price had retested this key supporting zone. We’re expecting a pullback before seeing that continuation to the downside, but that hasn’t happened yet. The price went two days bullish and has continued to the downside, creating that US Dollar weakness or seeing that US Dollar weakness continues. We are still at a major swing level. So if you look at that weekly timeframe, we are at a huge, huge zone where the market has reacted from numerous times in the past. We are oversold at this instance. We need to see some buying opportunities coming into this market for us to start being buyers of the US Dollar again, but for now, it looks like the US Dollar weakness is going to continue and that we could potentially see that going further down the line. It is why I always talk about looking at that four-hour trend. We can see the four-hour trend nearly changed cycle, but it struggled. The market came back down, then we had this little move, through here. We were expecting the market to continue to be bullish, pull back, retest this zone, and then move to the downside again. But instead, the market failed at these previous highs and has continued to push lower. We can anticipate that if this market takes out this next structure low on the US Dollar index, we can look for further shorting opportunities on the US Dollar in line with the overall trends.

Now, seasonal reports are saying that we should be looking to buy the US Dollar, and the strength from the weakness table suggests that the market is very oversold and we know that. But, until the market changes and gives us any confirmed direction change on the technicals, we can’t continue to for those US Dollar buys. We have to look to sell the US Dollar, and EUR is benefiting off the back of it at the moment. The price is rallying to the upside once again. I think a lot of sellers would be in the market at the moment.

When we spoke about EUR, we said that we wanted to see that four-hour trend break again. We’re the only way we’d look to short it is if the market broke these lows, which it hasn’t. Using those technicals has allowed us to stay out of this market. The market rallied to the upside, and what we can look for now is the break and retest of those structure highs instead. We could anticipate the market coming up into these highs, breaking out, pulling back and then continuing to move to the upside. If that US Dollar weakness continues, very same thing with the GB Pound here, the markets are failing to make any lower lows on the four-hour timeframe. The price continues to the upside, which is very similar to Aussie and Kiwi. It creates a lower low. Unfortunately for us, it’s tagged us in the markets continue to move to the upside, but what we would expect is that we’ve got quite a wide stop on this, so if the US Dollar strength does start creeping in at some point, then Kiwi would be affected.

We’re still looking to sell the NZ Dollar against stronger currencies. Nevertheless, we’re waiting for that US Dollar to start finding a little bit of support whether it will be from down here, or we may even get a new low form, and a retest of the 92 US Dollar area would be interesting to take note. But US Dollar is continuing to fall, stay on the back of that short-term US Dollar weakness until we do get any confirmed changes in cycle.

Thanks for watching. I’ll speak to you soon.

We hope our forex chart of the day analysis helps you in your trades. Practice trading the major currency pair with free $50,000 funding when you sign up for a free demo account at Blueberry Markets.


Blueberry Markets is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.