In this week’s Market Outlook, we take a look at the #GBPUSD, #EURUSD, #EURNZD and more!
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Hi, and welcome to Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to take a look at the Forex Market Outlook. We’re going to identify the strengths and weaknesses of the currencies this week, and we’re going to look for opportunities.
If we look at the strength and weakness table, we can see that the EUR remained fairly strong, it was the strongest currency of the week. We looked at this against multiple currency pairs, including the Swiss Franc, which we’re going to look at again going into next week. We’re going to look at EUR/GBP as GB Pound is losing a little bit of value and we’re also going to take a look at EUR/NZD.
I quite like the idea that we’re going to see some downside to the Kiwi, still waiting for the weakness to start showing up on the strength and weakness table analysis. But we’re still at that plus six, showing us that there is a potential reversal for the NZ Dollar, which I want to keep a good eye on—looking for that this week as well.
Let’s go and take a look at our major currency pairs. First, I’m going to start on the US Dollar index. The price is currently still sitting at these key structure lows, in here. If we saw, maybe, EUR/USD push to the upside, I would expect a slight break out here, with the potential for the markets to come and retest the weekly lows around 95 US Dollars. Keep an eye on that. If we see that, if the market starts to bounce, we could see a bit of EUR/USD continuing in the range.
If we go to EUR/USD, we can see that the price is at these key areas of resistance and even the key resistance zone. If I direct that left, we can see those weekly highs as well. A lot of resistance in EUR/USD doesn’t mean that the EUR will necessarily be weak. It may see some US Dollar strength come back in, and we could see some of the markets push towards this low, but we’re going to have to wait and see what happens next. If we get any rejections of this level, I don’t want to be buying EUR/USD where it is, and I want to be waiting for some reaction from that level or at least, a breakout to the upside. We could look for something like that.
We are going into GB Pound. The GB Pound is finding a little bit of support. Again, if we look at trends, we do have the market coming down, retesting these lows at these high, through here, then gave us a nice rejection. We looked for the buy on the market where it is currently sitting, back there. We could still see this market rally up and head towards these highs and even break out and head towards the previous highs around 1.2750 that could always be on the cards for the GB Pound. I do quite like the price action set up here.
If I go down into a four-hour timeframe, it looks quite good in GBP/JPY as well, to be honest. And the market is making lower lows here, but then it stops making those, and we do have a bit of a false breakout there. It could be a sign that we will see a push back up to the upside on GBP/USD.
Aussie is still range-bound, as you can see from this four-hour timeframe. If I go into the daily, it’s still in that range—nothing for us to do unless we see some reaction.
I’d trade the Kiwi range more than the Aussie range because the Kiwi on the strength and weakness chart says that it’s in that overbought condition and that we could see a reversal. So, I’d instead look for shorts here in Kiwi and trade the range rather than looking for AUD/USD short. Keep an eye on that; if we do start to see any decent price action out of this, we could see the price come and retest the structure lows, through here. Again, a lot of the majors are still really ranged bound.
If we take a look at the currency pairs of interest, for me, one pair that I quite like is EUR/NZD, and if I go into that weekly timeframe, we will see why, if I look right or left, I should say, the price came back down into this supporting level, here. It reacted, it came back down, it reacted once again. So, I quite like the idea of a breakout here on EUR/NZD.
If we look at the trend lines and things like that, we could anticipate a trend line breakout. I’m not the biggest fan of trend lines, but if we look at something like this, for instance, because of the daily timeframe, we have this trend line running here that the price has broken out of. But essentially, what we’re seeing is further consolidation.
If I take this away and bring in some box zones, this is the consolidation’s height. So, you can see the market is bouncing between this point, here, and these points, up here. So, the market could reach that once again. If it breaks out, then I’m looking for a long position on this. This fits quite nicely in with the strength and weakness table and the fact that the EUR is gaining strength. Kiwi could reverse its strength. It could mean that we’re going to get a big move to the upside on EUR/NZD. I do quite like this one for long opportunities.
USD/CHF, as of last week, we’re looking for longs. Again, if you’re going to look at that weekly timeframe, a nice bullish weekly close, I’m expecting maybe a retest of the previous weekly highs, in there, that I’ve already marked up. Again, I already marked up the area I’d like to buy from these previous structure points, through there.
The price does come back down into here, if you look for a nice daily bullish candlestick or if we go down into the four-hour timeframe, I’ll be looking for reversal patterns or changes in cycle on the four-hour. So, if the market comes back into here and double bottoms, we could look for a buy from there. If it gives us an inverse head and shoulders, we can look for the buy. If it gives a nice cycle change, we could look for the buy as well on EUR/CHF, but looking good for some upside into the previous weekly highs, through here on EUR/CHF.
I haven’t looked too much at EUR/GBP, but EUR/GBP suggests that we look for buying opportunities.
Now, we’re reviewing GBP/USD and EUR/USD. GBP/USD is finding a bit of support, and you can see the highs here on EUR/GBP. It may not be the best area to look for trading opportunities, so EUR/CHF and EUR/NZD are looking good for me. I like EUR/CHF because of the strength and weakness table as well.
Keep looking for those buying opportunities on this pair.
Thanks for watching the Forex Market Outlook this week, and I’ll catch you in the next video.
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