In this week’s Market Outlook we take a look at the #GBPUSD, #EURUSD, #AUDUSD and more!
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Hi, and welcome to this Blueberry Markets video of that with me, John Kibbler, Head Currency Analyst.
In this video, we’ll go through the Forex Market Outlook. We’ll take a look at the strengths and weakness chart of the week, then take a look at our major currency pairs and the currency pairs of interest.
Strength and weakness chart
The EUR has dropped a bit of strength and the GB Pound has gained some value. It’s gone from the reversal states of minus five to minus three, which is good. It’s what I want to see.
The AU Dollar has continued to gain some strength, but the AUD/USD price is on a significant level. We could start seeing that Aussie weakness start to creep in. We’ve been saying that for the past couple of weeks, but this could be the point where the price does reverse.
The Kiwi has gained some slight value. Nothing really changes for the US Dollar, CA Dollar, Swiss Franc, and r JP Yen.
Let’s jump into our major currency pairs on the US Dollar index. So, we saw the price break through and close below the low on the weekly timeframe last week. We also saw another dive to the downside.
Looking left, we are at a little bit of support. It’s just a minor zone where the price bounced from so we can see, around December 2019, the price formed this low, rallied, dropped through, and the false breakout rallied. Now, we retest in this run.
If I go into a daily timeframe, you can see that we started to get some bullish. We can abolish the candlestick form after a very long run of bearishness.
I’m expecting the price to reverse and head back towards 9850 in the short-term. Then, look for that potential US Dollar weakness to continue where we break these lows or continue down into this95 area or just break down and then bounce.
The idea of the price coming back to retest those range lows around 9850 for some further downside going into EUR would mean that we get a pullback on EUR/USD., we don’t know if we’ll get a retest of this zone because the price seems to be quite far away from those previous structure highs like the zone between the key level of 112 and this 1140 area. If the price were to drop down here and the US Dollar index was at the point where it could reverse, then we’ll look for long opportunities on EUR/USD.
To continue, the GB Pound has broken out of the previous ring holes and closed above so it’d be interesting to see closes.
If we get a bearish candlestick, that could be a false breakout of the high. But, the price for GB Pound is looking for a reversal at the moment. The GB Pound strength could be coming in.
We can clearly see this trend to the upside. The price came back and retested these structure hollows here, then bounced to the episodes. That’s what I’m gonna be looking for on GBP/USD, with a rally of potentially 128.
We’ve already got that reversal. I’ve marked out a bit of a pattern. I’m actually going to jump into the daily timeframe first. We can see that the last time the price was at this significant area in that condition, we had a nice move to the downside.
Are we going to get something similar again? We’re not expecting the price to fall down here. That’s just unrealistic, but what we could see is a retest of that previous breakout high around 6650.
The candlesticks are starting to become very low in range. The market is closing back within the previous highs and lows on each candlestick, and if we’re going to the four-hour timeframe, we are getting some bearish divergence because the price is making these higher highs here, and the RSI is forming lower highs.
So. you’re actually getting some divergence here, which is adding a bit of confluence to an AUS/USD short. W can look for either a break of this pattern or a break of the current lows, which is around this 0.6-80.
So, the price does take these current lows out and pulls back. Look for that short opportunity on AUS/USD.
Going into next week, Kiwi dollar; nothing to really to report here.
Kiwi has gained a little bit. We’ve surpassed the level at which I was looking for some reversals. The price is still looking for more upside from Kiwi.
Kiwi and Aussie tend to follow each other, so we could also see a breakdown here but it’s not really our focus.
CAD/USD could rally back up. We set an order above this candlestick high but it didn’t get triggered. We cancelled that order, but now we’re back and retested in these previous structure highs.
We could get a little bit of a rally into the lows, maybe, around this 1:37 area. It would be ideal for that continuation, so something like this at that point.
Chart of the week
For Chart of the Week, I’m going to ignore USD/JPY and USD/CHF – not really on the ride. Although, USD/CHF broke and formed a false breakout on this daily range, so it could suggest that the price is moving back towards .9800 highs.
Keep your eye on that if that’s something you’re interested in. Even if you look to the four-hour, you can see that an inverse head & shoulders pattern could form.
Chart of the Week is going to be GBP/AUS again because the price is still pushing lower. They had this really big downtrend, but now that the AUD/USD price is at resistance, the GB Pound is breaking above resistance. That shows us that this could move to the upside.
Again, we’ve got this pattern forming where the price is just bottoming out. I’d like to see a challenge of toggle on our four-hour timeframe. So, if we take out this current high here, then I’ll look for the pullback into that 1.8 then look to get long on GBP/AUD. They really like this market.
Still, I think it has a lot to offer. We’re just waiting for some really good opportunity from it. If price action goes to that oversold condition, the last time it was there was around here, and look at the rally we had.
We are still very interested in buying GBP/AUD, but only if it’s right in terms of price action.
So, keep an eye on that this week, and I hope I’ll speak to you very soon. Any comments and questions, as usual, drop them in the comment section below. Cheers.
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