The #Forex Market Wrap is here!
Follow the link to learn what key levels have been hit this week!
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Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, I’m going to go through the Forex Market Wrap. I’m going to look at what happened this week, and see what key levels were tested.
Starting on USD/JPY; we were looking for the potential of USD/JPY to do a couple of different things this week. We looked for the pullback into the key areas and then looked for long opportunities, which worked out well.
The price ended up finding resistance at these previous structure highs, here, and this is where we expected some sellers to come back into the market — dropped in nicely. In-line with that is USD/CHF, which we also covered, and we’ll go to in a second. But, I’m very familiar with that. The market dropped back down to the previous structure support and key level around 104.50s, where we can see that the market found numerous support and resistance here. We’ve started to see some buyers step back in now.
If you were looking for buyers around this level, you would have done very well this week,f you also look for the short back to that level, that’s also doing pretty well.
If I bring in USD/CHF, we can also see that USD/CHF worked out well. What we were discussing and focusing on, looking at the impulse and retracement phases in the market, it’s showing you how you can benefit from trading both the trend direction and the counter-trend direction.
Now, counter-trend trading is more difficult than trend trading. However, counter-trend trading can be pretty efficient, as well.
You can see here; we talked about the potential of USD/CHF to come back and retest this area, here. We expected the market to come back to this point where it created this inverse head and shoulders pattern.
Now, this is where many retail traders want to get involved because what they’re looking for, in particular, are these types of patterns such as the head and shoulders pattern.
I expected the price to come back down into this level where we could find some support, and that’s exactly what’s played out quite nicely. In terms of the four-hour timeframe, the price came up, gave a little opportunity to get short on the lower highs, here, and has dropped nicely into this area of support now.
However, I don’t want to jump on this too much. The reason is that it was such a huge retracement. We may still get a little bit of downside before we see any further upside here. The USD/CHF is back at this key supporting level. We’ll look at this next week, and we’ll analyse the strength and weakness of the currencies.
EUR/USD was something that we talked about at the beginning of the week. We discussed that you could be looking for long opportunities throughout the week, and they also played out very well.
I was looking for 1.2165 to be the area that we looked to short in the market. However, looking at the candlesticks, we can see that the market was closing back within the previous candlestick ranges. Typically, when we see that, we get a reaction.
The four-hour chart is quite interesting because we’ve seen the market breakthrough these previous structure lows here. So, we could look for potential resistance here. The only problem is that although we do have two confirmed closes below this low, here, the market’s coming back quite quickly, which is not something that you’d want to see. You’d want to see some slow retracements like these here where the market stops and stalls.
We don’t have that at the moment. It’s quite strong; bullish reaction after the market hit these lows there. We have to be careful going short on EUR/USD because we could still see a rally back up into 1.2165 before seeing the continuation.
But with EUR/USD, I still see a lot of downside after seeing how this Friday candle closed. We’re waiting to see how Monday closes as well, and we’ll make our predictions on the weekend.
Finally, we had a little look at XAU. I wanted to see if XAU would potentially break to the downside here. I still like the idea of selling XAU towards this key level, around $1700. Now, the price is stalling around this point, and we have yields rising as well.
I do expect, maybe, a little bit of US Dollar strength to follow through, especially mid-term, maybe not in the short-term. We may get a bit of a chop still. But mid-term, if those yields keep rising, we could still see some US Dollar strength, and $1700 is where I’d be looking for XAU to head to next.
Thanks for watching the videos this week. I hope you enjoyed them. If you did, please give this video a thumbs-up. If you did trade any market, which ones did you trade? Let me know in the comments section below, and I’ll speak to you soon.
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