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 be taking a look at the Forex Market Outlook, we’re going to have a look at some markets of interest, and pretty much see how the US Dollar continues to remain weak.
We’ve also got the AU Dollar, which is seeing a little bit of weakness at the moment, and basically just a lot of majors coming into some key levels as the market continues to push to the upside.
So we’re going to start here with EUR/USD, we can see the trend is very clear to the upside.
If I go to the daily time frame, we can see that trend in more detail, recently breaking out of this 1.2-1.21 level and heading higher. Now, the price is starting to create a little bit of a reversal signal, so what we might end up doing this week is maybe even have a slight pullback down into some key zones. We do have this area, here, where the price could pullback in for a continuation. We do have the market in overbought conditions, over here. So typically, when we see these markets coming into these oversold and overbought conditions, we often see small or large reversals of the price. And there’s potential here for the price to drop a little bit lower back into this 1.2 area for a continuation of the trend.
Now, we know the US Dollar is typically weaker through December until the start of January. So I’m not looking to necessarily continue to buy the US Dollar immediately. If we get some pullback situation, here, then this is going to be a buy zone where I expect the trend to continue from, or if the US Dollar weakness is going to continue, we may see the market rally straight up into this 1.22 level. It’s just at the moment, there could be a retracement phase about to set up, here, of the overall trend at the moment. One way we can check to see if that is happening is by going down to that four-hour timeframe. And like we said last week, identify the four-hour trend, and if you can stay on the side of the four-hour trend, you’ll be doing really well. So to me, the four-hour trend looks a little bit like this at the moment. So, the previous high and low that I can clearly see is this high around 1.2090 and this low around 1.2040. Now, if the price was to come back into this high, I would expect a rally up from this area. Maybe, even a triple top situation going on around 120-160. If we’re to challenge the cycle, there, then that would give us a signal that the price would be in that retracement phase.
So, that’s one sign that we can look for a retracement. Second, if the price does fall and we take out these lows, here, then obviously, that would be a challenging cycle as well. But, the likelihood of that happening is very low compared to the continuation of the four-hour trend from the previous structure highs, then a break of that trend, and a continuation down at that point. So, we may see a little bit of reversal coming in here on EUR/USD. We’re just going to keep an eye on that four-hour trend first.
The GB Pound is showing us a little bit a sign that we could see a little bit of reversal. We retested 1.35 this week – a huge week in the timeframe. I see a little bit of rejection up at this point, but really, we’re just going to see how the price reacts. If we break out of the highs around 135-12 and we close above those, the GB Pound could be on its way for a good while. Perhaps back into the 1.42. If we reject, we could see the price back down at these lows, through here.
So, we’re keeping an eye on GB Pound as well. If the EUR/USD price is looking like it may retrace, we might get a retracement here as well. We’re seeing a lot of failed higher highs here where the prices aren’t really closing above the previous structure highs. We’re just getting wicks above them at the moment. We may get some reversal set up here as well.
The Aussie is pretty much the same. It’s starting to slow down, here, on the weekly timeframe. In the daily timeframe, we saw a nice engulfing candle that didn’t really play through in the end, but the four-hour and weekly is still at this zone. We get that slight close above the previous structure highs, but we need to see that two consecutive higher highs. If we get those two consecutive higher highs then we can look for that continuation.
But Aussie on the heat map was one of the weaker currencies going into this week, and I know we looked at EUR/AUD, and the potential for AUD/CHF could be on the cards as well. But, we’ll have a look at that in a moment.
Aussie could be running out of steam, the daily lows sit around about 0.7332. If the price breaks those, we may see a change in the trend here. But, we’re not necessarily looking for that exchange on AUD/USD. We might need to go to another Aussie pair.
So the Swiss Franc was quite strong last week according to strength and weakness. We can see, here, we have AUD/CHF with two clear levels ranging between them at the moment, a nice weekly bearish lower low lower close candlestick.
Going into the daily timeframe now, we’ve seen a little bit of bearishness out of this market. Again, going into the four-hour, if we see the four-hour trend continue, which would be a break of all these lows in here with the market taking that out, we could see some further downside to AUD/CHF.
So, I’m going to leave it there for now for the Forex Market outlook. But keeping an eye on our major currencies once again.
The Euro could be the one to watch with the potential pullback into the 1.2 level.
I hope you enjoyed the video today. I’ll speak to you soon.
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