In this week’s Market Outlook, we take a look at the key charts ahead of the election with #EURUSD, #NZDUSD, #USDJPY and more!
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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. We’re going to go through a few charts of interest.
Looking at the charts at the moment, there’s not much out there that interests me. The one thing that I do quite like the idea of is looking for those US Dollar buying opportunities. Still, the strength and weakness chart is showing us this week that it has gained some significant strength. I quite like it against EUR. EUR has been losing some value, and I quite like it against the JP Yen.
Let’s dive straight in. Here we have EUR/USD, and looking at this four-hour timeframe, we can see that the price has been trending to the downside. However, we’ve had this retracement move coming into effect. And, I still like the opportunity of getting short on EUR/USD.
I’ve pointed out a few key levels to watch. First things first, if we’re going to the daily timeframe, the price has a broken through trend, and we spoke about this a while ago about this channel and the market breaking to the downside and forming new lows, which the price has done.
However, what happens when the price is in these trending moments: we have areas where the market pullback continues and things like that. So, we have the impulse and retracement phases and, at the moment, I think, we are definitely in that retracement phase now. And we thought the trend would continue from this point last week, but it didn’t quite do that. It did have a nice little short-term move to the downside but then continued to push back up.
What I’m looking for is a continuation of the trend. Typically, when we see that happen, we would see a changing trend on the four-hour timeframe. If I were to highlight the retracement moves there – jump down into a four-hour time frame, zoom out a little bit.; let’s take that off and try and get in as much information as possible – The retracement moves were here and here on the daily timeframe. And you can see that typically, the market changes cycle. It then remains, forming lower lows and lower highs until we break out, and form a new higher high. That’s when the impulse continues to the upside in line with the daily trend. The market then breaks the downside, forms a nice little lower high, and doesn’t quite make the lower lows too much.
However, only because of its retracement phase and then the market impulses to the upside. I’m looking for that same effect to happen over here. I’m looking at this as the impulse moves on the daily timeframe where the market is making lower lows and lower highs. We’re now in the retracement phase.
What I’m looking for is if the market is going to continue in this retracement phase, is it going to come to the point of resistance? Maybe on this 1.2218 where the market recently found support, and resistance could then look for the market to come up and change cycle again? If you get a change in the cycle, that is the sign to look further for short opportunities. If the market is going to continue to make higher highs, this daily impulse is not ready to move, and these are nice ways of looking at the markets in terms of trend within a trend. And you can see that impulse move where the market is making lower lows and lower highs.
I’m looking for something like that to happen again. Suppose it happens at 1.2118, great. It may still happen at 1.2158. We may still get a lower low rejection and continuation at that point. If we do get that, we can look for some shorts back down into this low. Overall, in the longest-term scheme of things, I think the price will fall towards this 1.18 area. I’m still looking for those short opportunities.
NZD/USD on the flip side is looking quite nice. However, we had a potential for a lower high here on the daily timeframe, looking for that downside to continue here.
Going into the four-hour timeframe, you can see that we get an impulse move out of the market. We get higher highs and higher lows when we get the retracement phase, which then turns into an impulse that the daily take out here. Now, we’re looking for the retracement to turn into a trend again.
At the moment, we’ve formed this double top pattern where we could start seeing a little bit of downside. There’s a couple of key levels that are quite like Kiwi again. And the first one is where we’re at because the market has found some recent support and resistance and now, we’ broke back below it. Can we hold below it that it’s going to the key?
Next area I like is 7129, if the price can come through that, break through it, and continue down, that would be a good level to watch as well. Another level that I do like is this 7237 because if the price has found resistance, support, resistance, and resistance, it could find resistance again if it were to get to that area for some further downside.
Kiwi is looking good as well. Finally, USD/JPY. I like this market initially, just because if we look at the daily timeframe, the price has formed a new higher high. Again, looking at impulses and retracements.
If I were to go to the four-hour timeframe – zoom out a little bit – look at how the market reacts in these cycle moves. So, we have the impulse and markets making lower lows and lower highs. Look at the retracement phase; the market’s making higher highs. Now we’re coming down; we see an impulse phase, it’s making lower highs and lower lows. The market has now changed trends because it’s making out these highs just through here.
So, I’m looking for a continuation to the upside. The four-hours price is struggling to make any considerable lower lows or a bit of a false breakout here.
The key level to watch, for me, is 103.53. If the price can get there, I’ll be happy to look for longs. Alternatively, 103.83 resistance; if the price can breakthrough and retest, that would also be a good level to keep your eye on.
Only three charts interested me at the moment. We’ll see how the trend plays out in the week but keep an eye on these three charts.
Thanks for watching. I’ll speak to you soon.
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