FOREX MARKET WRAP: 13th November
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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 take a look at the Forex Market Wrap. We’re going to see how the market has played out this weekend.
We’ve seen a little bit of US Dollar strength come back into the market. So we’ve been looking at a couple of different currencies in particular. We focused on the GB Pound this week, and a little bit on the AU Dollar.
We were looking for the AU Dollar strength to come through a little bit, as the price was breaking out of these key areas.
So, if we take a look at the daily chart on Aussie, we were speaking about the fact that the price had broken to the upside – broke out of this really nice trend line, through here, after bouncing from that 0.7 supporting level, down through this key-area. Now once the price broke through, we were suggesting that, yes, the AU Dollar has obviously seen a little bit of strength at the moment. However, we don’t really want to be buyers here. We want to be buyers back down, at this supporting point. But that means we could have looked for other opportunities on the AU Dollar against weaker currencies.
And one currency that we identified as a weaker currency was GB Pound. That’s just because GB Pound was back at this structure high, back at that 1.33 level, it’s a really key-level and important level on GB Pound. We see that rejection, there. The market’s working its way within this channel.
Today, we’ve had a little bit of a pullback to the move that we saw, that initial downturn, but we expected that.
We spoke about the potential for the market to come back, retest 1.32, which is just this zone, through here. So, I’m not expecting this market to rush right through to the targets. If the market continues to form those lower lows and lower highs, I’d expect a continuation to the downside on GB Pound.
That’s what made us look towards GBP/AUD as well as a potential trading opportunity. Now, they’re having as much impulse as I’d like. GBP/AUD did move quite a decent way towards targets but ended up pulling back a little bit. Still, I like the thought of this market getting a little bit short just because of that GB Pound weakness and Aussie being back at some minor support, through here. So if that holds, then we could continue to look for the potential for the market on GBP/AUD to drop further.
One thing we do have to be a little bit careful about is the risk-on risk-off play.
That could be coming into the market. What I mean by that is, if I bring in the DOW, we can see that the market’s just finding some resistance as of late. It dropped in a little bit, through this area. This is an area we’ve been speaking about, as well as a little bit of a pullback on the DOW. So, we’ve had a couple of days where we’ve had a bit of a bearish market, which has led to some risk currencies being hurt by this CAD, in particular.
One currency pair that we can often look to for that risk is USD/MXN, and you can see we actually just look at USD/MXN. The price is back to the key supporting point around that 20.25 level and has started to bounce. You can see that when the market is in risk mode, the MXN Peso strengthens quite a lot. So this makes a really good pair to watch when we’re looking for that risk-on risk-off play.
Now, the price is bouncing here. Is that suggesting to us that there’s going to be some slight risk-off coming into the market? Potentially with that US Dollar gaining a little bit against the MXN Peso?
That could transition into a few pairs as well. Like, we had a little look at Kiwi and the fact that the price was back at some key resistance, that 069 level just tips that and rejected it with a nice daily bearish rejection.
We’re looking for the market to come back down to the downside. Again, a nice change in the cycle in the four-hour time frame. The price, potentially retracing back into those levels for some further downside as well. That could be a little bit of a sign that next week we have a little bit of a risk-off coming into the markets. That should affect Kiwi. Kiwi’s been quite strong for a while, so it might be at a point where we could see some reversals coming into that market.
I think GB Pound for the downside looks pretty good, just need some further confirmation here as well. But, we should expect maybe a little bit of US Dollar strength. That’s some key supporting area. We may see a little bit of risk-off and helping that move as well.
So, I hope you enjoyed the content this week. If you did, give this video a thumbs up, and I’ll speak to you soon.
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