Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to go through the Forex Market Outlook. It’s going to be a relatively quick Outlook because there hasn’t been that many changes to the currency strength and weaknesses.
So I’m just bringing in the strength and weakness table. The only thing that I’ve noticed that’s something that could be of use to us is the fact that the US Dollar is now starting to gain a little bit of value.
It’s moved from this minus 7 to minus 6. That’s showing us that the Dollar is starting to gain a little bit of strength.
Whether that will follow through, obviously, we still have to use the fundamentals of the trend to identify that, and the technical of the trend to identify that as well.
But at the moment, the US Dollar is starting to push through. So I’m looking for those buying opportunities on the US Dollar once again. Obviously, we’re already buying it against the AU Dollar, for instance, but there are other major currency pairs I’m going to go through,
So EUR/USD, we’ve had the first bearish close for about 8-weeks now, which is brilliant. Look at the theory of trend. We obviously look at the move to the upside and we anticipate a potential pullback into this area, here, to look for long opportunities, right? If that was a one-hour or four-hour chart, that’s what we’d be looking at and that’s no different for when I look at weekly charts. I see that the market has formed a higher high pattern. So, I want to identify an area that the market could potentially come to, in line with trends. What I’m looking at, here, is the area that is the previous structure highs on a weekly timeframe. So, what I’m suggesting is that if this is the start of the retracement phase, we could get a retracement back down to this zone before buyers were to come back into the market. If that’s the case, then we should see a trend within that. So, if we look at the impulse leg through here to here, and we had that bullish week to suggest that buyers were stepping back in again.
Now, going to the daily time frame, you’ll see the market rally to the upside. If I look at the four-hour time frame, you’ll see a really nice trend through that. You’ll see that the market’s making higher high and higher lows. So, it continues to make those higher highs and higher lows until we start to break to the downside now. Now that I’ve seen that, I’m looking for the market to start making lower lows and lower highs again, and that’s what we’ve got here. At the moment, we do have this really nice lower low pattern, which is something that I look for when I look to trade trends or look for those reversal sorts of setups.
Now, looking at the weekly time frame, if I’m anticipating price to come back down into this zone, here, then on that four-hour time frame, I’m expecting a downtrend to form, and we can see that the market has formed a new lower low.
So, for early opportunities, what I’ll be looking for is for the price to pull back into this low, here, because then I’m expecting this trend to continue from that point. Obviously, we do have a little bit of a stronger support level, here, because we’ve had resistance, support, support, support in the past. So, what I need to do then, once we take that earlier short position if the price action agrees with us as well, then I’d be looking for that to break and continue to the downside, heading towards this main target area down, here, on the weekly timeframe.
So for the early doors, we’re looking for the short off of these potential lows through, here. What I mean by that is, when price or if price even pulls back into those lows, I’ll be down here on my 15-minute time frame and I’ll be looking for the trend to continue. If the market does something like this, I’ll be looking for some double top pattern or something like that – that suggests that we’re going to get a move down. Very much like this pullback, here, when you see the four-hour trend,you see trend breaks. We breakthrough a few lows, then the market tanks to the downside.
We’re looking for the exact same here on EUR/USD, going into this week.
So, the weekly chart is looking good, there. Same with GB Pound. The GB Pound has also rejected these highs, through here, and it’s doing the exact same thing as EUR/USD. If the market were to pullback, could we see putting back into this zone here? Potentially. So, we’re looking for the price to drop down into this area.
If I go down into the four-hour timeframe again or even the daily, we’re looking for that structure to break down. In the four-hour time frame, we can see that the price hasn’t quite changed the cycle yet. That’s low, so I’m looking for the market to break through that, pullback, and then continue to the downside.
I’m looking for that trend on the four-hour to now change in our favor, here, on GBP/USD in order to look for shorting opportunities on the weekly.
Obviously, Aussie was already in, so there’s not much to talk about here. We can see that the four-hour time frame again could do with just breaking to the downside. If it does take out these lows, then you could look for adding position on the way down. That’s no problem at all. But pretty much with Aussie, which we kind of explained last week, we’re looking for the price again. If you look at the weekly time frame just to come back into this zone, that 0.7 area, where we can look for those short trades to end up around that point,
Same with Kiwi, We’re looking for the Kiwi to continue to the downside. Although Kiwi is kind of the one that’s already pushed lower because Kiwi was the weakest currency. You’ve already seen that push back down into this high. So, if anything, that might not be the one to watch this week.
It might be more looking towards Euro, your GB Pound, and your Aussie this week, whereas Kiwis kind of already made that move. So, be aware of that. USD/JPY could be one to watch, as well. We’ve spoken about this a couple of times. Is this level going to really hold? are we going to start pushing back towards the 112s?
We really want to see some kind of daily change in the cycle here to confirm that we did get the daily change in the cycle here. We were looking for buyers there, but the market fell through, retested the lows, and is now doing it again. So if we break through this high, here, and re-test, maybe, we can look for some longs there.
But, I’m looking more across on a JP Yen pair at DAC/JPY because CAD is obviously strong and JP Yen is weaker.
Now, we’re looking at the weekly time frame, still bullish, though a bit bearish last week but not horrendous.
The daily timeframe is making higher highs. It’s pulled back into that zone. How can we benefit from that? What if we look at the four-hour time frame?
What I like to wait for then is a trend to match up. So at the moment, we’ve got lower lows, and lower highs and the market hasn’t really trended above that area, there. If it breaks above these highs, I’m going to look for that pullback and continuation on CAD/JPY, just through here. Obviously, if I’m expecting CAD strength to continue, then our AUD/CAD position would, as well – I was very close to the targets.
So, we’re expecting that to rock through on Monday. So, let’s see what happens.
But CAD/JPY looks quite nice. I quite like the idea of the breakout above these highs, around 80.40. So, if it does break this high, here, and close above, look for those long positions. But mainly, we’re really focusing on the majors this week. The Euro, GB Pound, and Aussie look the best out of the bunch.
Keep an eye on these. I hope you have a successful week, and I’ll speak to you soon.
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