In this week’s Market Outlook, we take a look at the key charts of the week with #NZDUSD, #EURUSD, #EURNZD and more!
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Today, we’re going to discuss the Forex Market Outlook. We’re gonna identify the strengths and weaknesses of the currencies and then go through a few charts and levels of interest.
Strength and weakness chart
To start off, we’re looking at some huge changes and shifts in the strengths and weaknesses of the market, especially with the NZ Dollar. The Kiwi has dropped significantly. It was the weakest currency last week.
We were talking about this Kiwi weakness for a while and that we were looking for short opportunities. So, if you did focus purely on NZ Dollar weakness, you would have done pretty well out of the majority of the markets.
The strongest market last week was the US Dollar. The US Dollar is pretty strong through the end of this month.
We are approaching a time where the US Dollar comes into an area where it tops out through the end of March until the start of April. However, the US Dollar is very bullish according to strength and weakness.
Following that, the CA Dollar remained bullish last week. Even though it struggled to gain in other places as it’s already stronger than a lot of other currencies, it still remains in the high plus sixes.
We can see here that the strength meter of NZD (New Zealand Dollar) in the yellow line has dropped significantly, crossing multiple currencies except the JPY (Japanese Yen). This could give us many opportunities to sell the currency against stronger ones such as the USD, CAD, EURO and CHF.
Going to the strength meter, we can see the effect of the NZ Dollar.
Those markets could potentially change in trend, see different moves, and some key resistances get broken.
Looking at the EUR/USD, the price is in downtrend. We did speak about the overall market in an uptrend due to this weekly. However, due to the strength and weakness of the US Dollar, it’s likely for us to see some further downside in the short term.
In the daily time frame, there was an impulse, correction, impulse, and correction. It’s currently in an impulse phase now. We could be starting a correction phase because of a candlestick formation.
If the price were to break back above the key level of 1.1842, we could see the price head back towards the key resistance level of 1927.
Now, if the price were to get back into 1927, I think we could see some sellers come back into the market, and we could see another retest of the key supporting point.
EUR/USD is looking like the downtrend. It could continue in the short term. However, we may see a retracement phase come back into the market this week.
EURUSD could pullback this week after the market fell strongly last week. The key levels in play this week include 1.1824 which is the closest level and the major volume level above at 1.1927.
If the price breaks back above the 1.1824 level we could see the retracement phase begin and a daily chart pullback could see the price rally to the high volume level of 1.1927.
I really like the opportunities on the GB Pound. We spoke about this in the Forex Market Wrap, technically in a longer-term uptrend here. We do have key support at 1.3675, which the market has retested and found some support on.
Now, the price is finding some support. need to see some higher lows or some double bottom patterns to be a buyer of this market.
At the moment, we have the market making lower lows and lower highs. That’s unlikely to change unless we get some serious higher lows come in and we see a change of trend.
We need to focus on the resistance levels this week.
The resistance level could be up around 138.64. The reason is the candlestick range within the volume profiles. We can see that the price at 1.3864 is the highest traded volume level within this area.
That means that if the price comes back up to this point, we could see the downtrend continue. We have a nice area where the price may want to retest before moving higher.
GBPUSD could be an interesting chart to watch this week as the price suggests that the market has begun to pullback into the current downtrend. The blue box is the last area the market consolidated in before falling. We could see sellers jump back in if the price were to get to the high volume level of 1.3864. This is where the daily trend traders will likely add to their positions. On the counter-trend side, the recent support level of 1.3675 could be used again for any double bottom patterns.
The reason is because we’ve seen some strong support being driven from this point. So, one of two things could happen: we could either look for the potential reversal to set up this week if the price pulls back into this level; then we could start to see a higher low come in, then we could see a move back up into 1.3864, or we could see some sellers come back.
One chart to focus on is the Kiwi. NZ Dollar is very weak at the moment, and it looks like that’s going to continue.
We don’t want to sell at previous support points at0.6970s. I want to sell from key resistance areas.
So, I looked at the volume profiles within this area, which shows me what the institutions have been putting their biggest orders in the level of 0.7168. This is going to be the level where we could see sellers re-enter the market.
Alternatively, we’ll see the price potentially consolidating and see another break out to the downside. But for me, I think NZD/USD shorts are the best option.
Potentially not this week, but the next few weeks. As I said, we could see a pullback phase. But where do I want to be a seller of NZDUSD? I want to be a seller at 0.7168. Keep that level in mind.
NZDUSD has dropped drastically over the last week but is this current level the best for short opportunities, probably not. So, looking at the resistance levels there is a high volume level at 0.7168 which would be a likely area for sellers to re-enter the market.
Moving on to EURNZD, this could be the one pair of the week where we could see some big changes. The reason is because if I go take a look at this weekly timeframe, we can see that the price has found some significant support in the past.
The market significantly rallied too. Is that going to happen again? We have consolidated; the price has then gone to the upsides slightly. But are we going to get that significant change like we’ve seen in the past?
Well, if we take a look at the confluences from before, the market has respected the resistance. We’ve blown straight through this level now. I’m expecting the price to head to the upside.
If I go to the daily timeframe, the price has rallied, consolidated, then rallied.
The most traded level is 1.6622. So, if the price can come back to this point, we could see the market rally once more.
EURNZD could be the pair of the week based on the strength meter. The lines have recently crossed, which has been reflected in the price making a new higher high. The major trendline resistance breaking adds confluence to the move and if the price were to retest the high volume level of support at 1.6622, then we could look for another bullish move.
So I’d like to see the price pull back into this area, and I’d like to see buyers step back in at.
Those are the key charts of the week.
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