FOREX MARKET WRAP: 11th December
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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 Wrap. We’re going to look at some markets that we took a look at in the Outlook, and how those markets have performed, and what we can see potentially coming into next week.
Starting off with EUR/USD, we were looking at the possibility of a continuation of the uptrend into the next key area, which is that 1.2250 level, where we were looking for some downside to come in the market. We haven’t really seen a follow-through.
Looking at the four-hour timeframe, it’s pretty much ranged all week. So we’re speaking about the potential for the market to start trending back to the upside, here. But instead, the market has remained flat, very range-bound, and we were expecting that extension, which may still come going into next week. We may still see the market break to the upside and retest this 1.2250. As we said before, this is a huge zone where I would expect the market to go into towards the end of the year for it to potentially move lower approaching the new year.
So, we still have some room to go. I mean, until the market does make a defined breakout, we can wait to see what happens. Obviously, the market is finding some orders in and around this area. So, if we were to see a breakout to the upside, then the likelihood is that those buyers will continue. If we see a breakout lower, and vice versa, we’ll look for that continuation to the downside. With huge levels to still consider that 1.16, for instance, could be an area where the market heads towards on that move down. Still, there’s a lot of time to wait here. So, just wait for that breakout.
The GB Pound had a bit of a negative week, purely due to Brexit negotiations – pretty much breaking down. UK Prime Minister Boris Johnson has been talking lately about the possibility of a no-deal Brexit, which has seen prices fall. That obviously adds a lot of uncertainty in the market, which is going to put pressure on the GB Pound. And, we’ve got a couple of different confluences with that. We have this 1.35 level, which the market continually bounces off recently on multiple occasions, as well as being in an overbought condition, with a bit of divergence with the price making higher highs and the RSI making lower high. So, we could see a drop back towards this 1.27-1.26 level on the GB Pound.
So, keep an eye on this one, obviously, developments will affect the price. So, if we do start seeing any positive data, the market will likely head back to 1.35. If we see any negativity, the market will break to the downside, through there.
Kiwi is one that we spoke about. We are expecting a little bit more upside. The current trade reports are still heavily selling the NZ Dollar, so we need to see how those commercials will react next week. Are they going to add further contracts, or will they start to offload those contracts? That will be a telltale sign whether this market is going to head towards this level or not. If they’re adding that to their contracts, then we’ll likely see that run up into this key resistance level. If they’re starting to offload those contracts, then we would expect a little bit of consolidation, here, and then maybe a drop in price back towards this 67 level. So, we’ll keep an eye on that one next week, but nothing really happened here if we’re going to that four-hour timeframe, it is ranging like everything else this week.
The final chart that we took a look at was USD/CAD, and we decided to have an opportunity to look at shorts at 1.2796. The reason I chose this level is if we look left – there are huge amounts of interest in this area. The market has found support, resistance, support, and lots of chops. So, this makes me think that the market is very attracted to this level and if we were to get there, I would expect some shorts to come in around this area. So, we will have to keep our eye out on this one until next week. Unfortunately, we are four pips shy of the entry, but I do expect that to potentially retest next week and see if we can get a continuation of that US Dollar weakness.
I hope you enjoyed the content this week and I’ll speak to you soon.
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