In this week’s Market Outlook we take a look at the key charts of the week with #AUDUSD, #EURUSD, #GBPUSD and more!
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Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we’re going to take a look at some currencies of the week. We’re going to identify the strengths and weaknesses and go from there.
I know you guys like to see the strength and weakness chart, I’ll make sure that I keep adding it in. But, there’s not anything that’s like a drastic change going on here at the moment.
We’ve got EUR/GBP, Aussie gaining, CAD losing a little bit of strength and the JP Yen is on a reversal period. There’s nothing here to suggest that we’ve got too much going on. I think we’re going to see a little more US Dollar downside coming from what we’ve seen on the charts.
US Dollar Index
If I go into the US Dollar Index, on the weekly timeframe, we can see that the price is currently finding some resistance here and has formed a nice bearish weekly close now.
I’m expecting the price to, maybe, even push a little bit further to the downside. I wasn’t looking for the price to head up towards this 92 US Dollar area, where price found support, support, then broke through in the past, and I was expecting the price to run up into this level, here. But, the market is still finding some sellers and we can see this from the daily timeframe as well. The market tried to make head for some highs and ended up dropping back to the downside, here—many sellers are involved at the moment.
We need to see if that’s going to continue, or if that’s going to reverse. At the moment, that weekly bearish closes make me feel that the price could maybe come back and retest down into these previous structure lows that we’ve seen recently from the charts, and we can see that across the major currency pairs as well.
If we’re going to the weekly timeframe of EUR/USD, we can see that the market did find support in that 1.2 level and rejected then moved nicely to the upside causing a nice bullish weekly close here; I still feel like there’s a little bit of resistance at 1.2165. However, we could see prices breaking above that level going into next week.
If I go down into the daily timeframe, you can see that price shows us that there’s a little bit of support around this area, around about 1.21. It went straight past that 1.21 level, and then came back and retested it.
To me, there’s potential for this market to continue to push to the upside going into next week.
Now, that may not be the case. We might get that US Dollar strength. But looking at those weekly closes, that’s what it’s suggesting to us this week. You could also watch this 1.21 level as a short-term break and retest for some downside into 1.2. But, the only way I’d want to be a full-on buyer of this market is if it did break above these previous highs and this resistance of 1.2165.
You’ve got to have the seller’s mentality until that occurs but when it does like we’re predicting here, we could see the market rally up into 1.2340s. So, keep an eye on the EUR.
The GB Pound is continuing to be very strong. 1.3750 proved to not be a sticking point at all. It broke to the upside and headed towards key areas that we spoke about a while ago. We looked to the weekly timeframe, and what we identified was the most traded level through this block, here, and the most traded levels around 1.3980s. That’s where I think the price will be heading for the GB Pound especially now we’ve broken to the upside, here.
If you look at some four-hour structures, there’s a couple of different areas you could watch. The first area would be previous structure lows because we’ve had the market find some resistance in here, and support here. So, what I’d be looking for is if the price could come back to this point, the market will hold there and continue to the upside.
Alternatively, there’s a nice level down at 1.3743s or 1.3750s, this zone here, where the market broke out recently, that would be a major swing level for the market to move to the upside as well.
But ultimately, I quite like the GB Pound going up to 139.77. So, the final most alternative method would be a break of these highs on a retest for some upside. There are multiple choices there on the GB Pound because it is very bullish and against the US Dollar.
AUD/USD, again, had a very bullish week. We spoke about this last week where the market could continue to push to the upside, and it followed through nicely.
Looking at the daily timeframe, we didn’t get that much of a pullback last week. It continued to push to the upside, breaking through that key areas.
I am looking at the four-hour timeframe. If I wanted to be a buyer of this market, where would I want to be a buyer from? From a trend perspective, I’ll look at previous structure lows or at least back down into 7689. A nice low level or low volume area through this area, here, could offer a great support point, and it’s previous support, resistance, and resistance. Could it act as support there?
I wouldn’t mind being a buyer down here with the potential for the price to head back up into these swing highs. I want to look for a double bottom pattern here, come from some change in the cycle for the market to rally up. Alternatively, we could see the market head straight north towards this level and break to the downside. But, this is a key swing point. I would like to see the price head towards this level, here.
So looking back, we talked about this and the potential for the market to break out. We didn’t get the breakout yet. In fact, after we spoke about it, the market sunk to the downside. It looked like the opportunity for potentially watching since the breakout was over. But, I still feel like this could be a good opportunity, especially if the US Dollar still has some room to go. I’m going to be watching these range highs, here.
I think we’ve got more upside on NZD/USD since the strength and weakness were showing us that it’s not yet breaking down and that we could see this range being broken.
That’s the Forex Market Outlook for the week’s trading. I hope you had a great weekend, and I’ll speak to you soon.
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