In this week’s Market Outlook we take a look at the key charts ahead of the election with #AUDUSD, #EURUSD , #NZDUSD 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 take a look at some major currency pairs. We’re going to look at the Forex Market Outlook and talk about a couple of key things.
So last week, we spoke about the Dollar in-depth, and we talked about the potential for the Dollar index to continue to push to the downside and potentially break that 92 Dollars and just reiterated how important 92 Dollars was to the Dollar index.
The price broke below that, close below on the week. That is kind of a first sign that the Dollar weakness could continue.
Obviously, I would like to see a second week close below that 92 level to then really look for further downside. But, what we can do is just take a look at some majors and just have a look at where the prices are on the major currency pairs.
I really like the potential for the Euro to break a little bit higher, and there’s a couple of areas which I want to see happen, or what I’m thinking can happen to go into this week.
We had a really nice bullish week going in on the Euro, breaking back above this recent swing high, which was around 1925 when the market found some sellers recently.
The price has broken above that little area, but that may be an area that we look at as we go down into the lower time frames.
But essentially, we have this key 1.2 level sitting right above, which is quite close to where the area of the price is right now, and I’m expecting a little bit of upside to come into that 1.2 level.
Now, if the price breaks above that 1.2, and obviously, I think there’s going to be a bit of further upside. Maybe, into 1.22, which is all this interaction over here back in 2018. So, that’s only possible if we break above that area, and we may only do that sort of thing going into this week, and next week we might look at that 1.22 level.
I always look at the four-hour timeframe to really give me the sort of key in what’s going on in terms of trend.
Now what we did get sort of going into last week, if I just zoom out a little bit and just make sure to squeeze all this data, we had this little bit of a change in trend coming in through here.
Now typically, I look for two closes below the previous low, which was here. Now we did get those two closes. It wasn’t very convincing, and we had a really bearish candlestick, and then we started to close back above.
So what this really was, a little bit of a false break out, and the price continued that four-hour trend to the upside, and that is what I always look for. You always look to see how that four-hour trend is playing out because typically, the market will stay in line with that four-hour trend.
So at the moment, we’re in an uptrend, we have previous structure highs coming in here, which is around about 1940, and then we have previous structure lows, which is down through here, which is around about 1885-1890.
This is going to be key for us going into this week, or at least the start of this week.
What we’re going to see? Are we going to see the market rally up into 1.2 first and react to maybe get some bearishness going on or are we going to break out? Or are we going to pull back first at the start of the week? Are we going to retest this structure?
Now, I think we’re okay to continue to look for longs, as long as the price remains above these lows.
So if the market doesn’t remain above these lows and we break to the downside, then I think we could see that Dollar weakness fading, and we could be seeing a bit of strength coming back into the market because we are still around that 92 Dollar level.
t’s still going to be something that we consider when looking at the markets at the moment. Now, I’m still thinking the Dollars going to react with the seasonal, and that Dollar and bearishness are going to come in.
So I’m not really expecting that break to the downside, but we have to look at both sides of the coin here and see what potentially could happen.
If the price starts trading below this 18.84 area 1885, then I would consider a bit of a Dollar bullish week.
However, at the moment, everything’s in a bullish uptrend. I’m expecting further upside. It’s just how does the price react at 1.2. Will it break? Will it bounce? We’ll have to have a little look when it comes to it.
Kiwi is very strong at the moment. Kiwi is continuing to break to the upside.
Were actually just taking out these previous structure highs again kind of in that sort of situation of breaking out of a level.
Are we going to continue to see that bullishness or are we going to see a bit of a pullback?
This is going to be a key one for us this week. May even look at not really trading Kiwi much, just seeing how the price does react at this level. Because, if we do get a false breakout here, then we could maybe see some pullbacks into this level, but as I said, I’m expecting the Dollar to weaken slightly. So the pullback isn’t highly likely.
We’ll have to see how the price reacts early in the week. But essentially, the price continues to move to the upside. We could still see a retest of around about 0.7050, this kind of previous structure area here and then a reaction.
Again, the four-hour trend is going to be key. The four-hour trend is very very tight at the moment. We can see that it’s in this channel through here. The market is very much becoming a little bit stuck, in terms of we’re just getting very tight rallies up now.
I would anticipate if we were to kind hit that 0.705 that we would get some kind of pullback.
I’d love to be a buyer again, back down to the 0.68. But again, we’ll have to wait for us to see how the price does react to this at the moment.
But four-hour is a very, very tight range going on here at the moment, whereas for Euro, we’ve got some decent room to the upside.
The USD/CAD is super interesting. Again we’ve talked about this before the price is at 1.3.
What we talked about was the fact that despite the price was at 1.3, oil was rallying, and I was looking at the WTI, at the fact that if the price was to break and trade above 45 Dollars, then I’d be happily looking for USD/CAD to break lower.
So if I just actually let me just jump onto this gold chart a second and we just bring in the market watch, and I just go down into oil and just bring this into the screen.
We can clearly see at the moment oil is trading above that 44 level, a huge huge level on oil recently, and the price could be about to continue to push a little bit higher. If that does continue, I think USD/CAD is going to take out 1.3, and we can see this market drop a little bit further as well.
So, the two markets are very very important levels. WTI breaking above here could really be the sign of USD/CAD breaking into the downside.
Three interesting charts to really take a look at, EUR/USD showing us that the Dollar is weak at the moment, as well as Kiwi.
Kiwi is in a bit of a tight trading range, so be interesting to see how this performs going into this week.
USD/CAD back to 1.3, let’s see how oil reacts. If oil continues to push higher, maybe even retesting these structure lows, around about 50 Dollars,
I think USD/CAD will break, and I think USD/CAD will end up heading towards some major swing lows. Whether it be back into sort of 125s or even just these smaller lows around about 12760s.
So keep an eye on that this week. I hope you enjoy the video update, and I’ll speak to you soon.
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