In this week’s Market Outlook we take a look at the key charts ahead of the election with #GOLD, #EURUSD , #SILVER 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 identify a couple of charts of interest going into this week.
Now obviously, huge news over this weekend: Joe Biden is looking like he’s going to be the next president of the United States. I only said that just because Trump is going to contest. The likelihood is that they’re going to get a couple of recounts from a couple of states. But it is looking like Biden is the clear winner, and we should see that effect rolling into the markets going into this week.
Now, two charts that I really, really like are gold and silver. I’ll go break those charts down. But essentially, I think gold and silver will be good players at the moment. Seasonally, we look for those gold-long opportunities as well as silver. But, these two charts are looking really good ever since they’ve broken out some key-areas.
AUD/USD are also looking pretty good for some potential long. I think the US Dollar could potentially weaken on this result. So it’d be interesting to see how they actually open, whether we’ll get many gaps in the market or anything like that. But essentially, we’ll have a little look when that comes through.
First of all, just going to Aussie because we have a couple of technical opportunities here, which I quite like. I like the fact that the price recently retested this 0.7 level. Obviously, this week, this area was a huge talking point for us, which is where we’re going to get that break out to the downside on the Trump victory. If Biden won, what would happen to Aussie? Will we see that Aussie gets stronger? Because the likelihood is that the trade deal between the US and China will likely come to an end, so at least some pressure will be relieved there. We started to see Aussie strength coming through and I think that’s going to follow on through this week.
What I’ll be looking for is potential long-opportunities on pullbacks and the nice area here, 0.7160, this previous structure highs would be a good area to look for that position. If the price comes down into here, we will start to see some buying action going on – there could be an opportunity to trade long.
Like this: if we look at the RSI, there’s a nice little break out of the trend line here. Could we see prices come back into here on the RSI? Match up with that previous structure high and bounce to the upside – we could potentially see something like that going on here. But I like the opportunity here on Aussie to retest that 0.74.
Obviously, EUR/USD is going to be a huge talking point, we actually saw a breakout of this recent trend line. Now, there is a little bit of a move going on with the RSI: we’ve got this sort of upward sort of channel going on here on the RSI, which suggests that we could see a little bit of a resistance holding on here. But this key-area is going to be interesting anyway, hasn’t taken out the highs yet. That 119-16 area is something that if the price was the breakthrough, I think we’re going to see a further weakening of the US Dollar.
See EUR/USD head to the upside. But unlike Aussie, we haven’t actually had that break of highs just yet. We’re actually back at this resistance point. I really want to see that breakdown form in order to be long on EUR/USD. If that doesn’t happen, then we’re likely going to stay within this consolidation pattern at the moment. But, that potential for the market to break to the upside is here and it’s looking good.
Moving on to gold. Obviously, gold was a focus point for us last week. We talked specifically about a couple of different areas of support, which we’d like to be buyers from.
The price didn’t quite make it to the area where I really wanted to be a buyer. But that was obviously just me looking for that overextended area. I thought the volatility of the election would cause the price to drop this over-extended area where we’d look for those long positions but that didn’t follow through. The price remained capped around 1850. We’ve now broken into new highs, we’ve broken out of these trend lines resistances, around about 19-25, 19-30.
So I’m looking for prices to come back in, maybe retest that structure and bounce to the upside.
Looking for those long-opportunities now on gold. If we’re going to the four-hour timeframe, we’ve got the 50 and the 200 moving average crossings. If we look back in sort of the recent history of gold and just look at those areas where it’s crossed bullish on the 50, and the 200 moving average is we’ve got some decent rallies off the back of that most recently. So I’m looking for a similar thing to happen again on gold – looking for prices to breakout.
Now, we do have a nice trend line support running in about 19-26. This horizontal zone as well, brilliant zone, which we’ve already discussed the daily chart. But if the price was to pull back into this zone through here, the 50 and the 200 was spreading out at this point. This should be a good opportunity to go long on gold, so we’re looking for a pullback into sort of that 1930 area here.
Very similar to silver, silver’s looking really nice as well. We have similar traits going on here like the price is working within this consolidation pattern. We haven’t broken out sort of the main trend line through here, but we’ve broken out this short-term trend line. If we look at the RSI indicator, we’ve broken out of the highs on the RSI. That’s because also a potential sign of some upside.
A lot of pro traders use the RSI as support and resistance rather than looking at it as just overbought and oversold. But that’s something we can talk about later in the week.
But I like the opportunity here: the price is breaking out and I like the fact that the price hasn’t really taken out any of these lows. It’s just kept within this sort of zone through here. The price didn’t really struggle at this point. It just keeps bouncing. So now, we’re starting to see that breakout to the upside. I think we’re going to see longs coming in on silver as well, very similar to gold. I’ll be looking for some pullback continuation moves on this trend line.
There’s a short-term trendline resistance here–If I was to draw that a little bit better off these previous structure highs, I don’t know if it will let me. I have to redraw that. So, if I just go off these tips of wicks, through there, just to make it a little bit more accurate, so that’s coming in around 24.70, 24.60 zones.
If the price could make it down back to this point, I’ll be looking for those long opportunities on silver as well. I think there are some good potential opportunities for silver and gold for some decent moves coming into the end of the year.
Those will be our main focus going into this week. Obviously, be careful with our currencies. We don’t know what’s going to happen again with regards to Trump contesting the outcome. He’s not going to leave without a fight. Let’s put it that way, and that could cause some volatility in the markets as well, which we need to be aware of.
Hopefully, we see some decent trading opportunities. The US Dollar, I think, is going to weaken in this outcome. But, I think we’re going to see some gold and silver longs, which could offer some decent risks rewards ratios.
Thanks for watching this video update. Thanks for watching the Forex Market Outlook with me, John Kibbler, Head Currency Analyst. If you have any comments, or questions drop them in the comment section below, and I’ll speak to you soon.
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