FOREX MARKET WRAP: 17th July
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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 see what charts are moving and what we could see coming into next week.
Well, not a lot has happened this week. The US Dollar has lost some value. It broke these key structure lows over to our left-hand side, broke through that 96.30-40 level, pushed to the downside, and is now retesting this 96 US Dollar level and seems to be holding there at the moment.
If the price can break through these structure lows, through here, then it will be good to look for further shorts, but we’ve got to take these lows out first. If we can do that, then I expect the US Dollar to continue to break to the downside. Ultimately, the price remains range-bound on the US Dollar, and that’s why we haven’t seen much movement elsewhere.
The only currency that’s benefited this week is the EUR. If we go down to EUR/USD, EUR is benefiting on the back of the US Dollar weakness, and we can see that across multiple pairs. The only thing now is that the price is approaching this key area of resistance. Are we going to see another move to the downside like we did here? Potentially. So, we need to sit and wait out and see what happens here. Are we going to get a breakout or are we going to get a bounce from these key structure highs, through there? This is a really important area of resistance.
If I go up into that weekly timeframe, you can see that the price is approaching these weekly swing highs, through here. Seeing what can happen here on EUR, let’s see if we can break to the upside or break lower before making any trading positions in there.
GB Pound, again, has a very shallow week. It hasn’t moved all that much. You can see, inside, there’s a bearish candle forming at the moment. No real impulse is coming here. So, nothing to report on GB Pound.
We were expecting that strength to continue this week, and we saw a nice reversal candle set up on Tuesday. And then, I was expecting that to follow through on Wednesday. It didn’t quite follow through. Instead, we’ve seen a bit of a bearish day and today’s is a little bit on the bearish side as the US Dollar finds a little bit of support at those key swing lows.
Aussie is very much range-bound as well. A lot of the majors in ranges. We need to start seeing some momentum somewhere else. But, Aussie is very much retesting the top of this range and is pretty much looking like it might head back towards the lows coming into next week.
So, I’m waiting to see if we can get a breakout and some direction from these markets because, at the moment, it’s been very tricky. Lots of back and forth going on, lots of ranges being formed across the charts and that’s not the best environment to be looking for these opportunities.
I did get a question yesterday saying, “how could you trade the ranges?” All you’d be looking to do is short from the top and buy from the bottom. What I’d be doing is following a similar path to a normal trend environment where I would look for the market to change cycle at the top of the range on the four-hour timeframe, for instance, and then look to buy or sell the market.
If I bring this range into view here on AUD/USD, what I’d be looking to do is trade the breakouts or wait for the change in the cycle and then look to trade. But it isn’t easy to do, which is why I suggest you stay away from that. But, if the market is starting to form a new low through there, then I’d suggest maybe looking for a retest and a move to the downside like here. We have this nice double bottom pattern, breakout, retest, then the market rallies to the upside. And we don’t quite get it here, we get a breakout, a retest, but it doesn’t quite reach the top of the range. Again, this is why you’ve got to be very careful with making those range trading opportunities. From my experience, if you are a new trader, then I would suggest staying away from this range trading environment and looking and focusing on the trend.
There have been some good moves this week. EUR/CHF was the trending chart of the week, and if you look at the daily timeframe, we’ve got those nice bullish candlesticks coming into this week. I wanted to trade that four-hour trend going up, and we can see the markets making those nice higher highs and higher lows. We’re expecting that to continue going into next week if we start seeing that daily momentum start pushing back to the upside.
Keep an eye on the EUR. EUR is looking quite bullish but other than that; there’s not much to report.
We’ll take a quick look at XAU. XAU didn’t quite pull back to our area of interest. Once again, I was looking for the market to come and retest these structure highs, down in here, and didn’t quite make it there, unfortunately. And the price seems to be pushing back to the upside. But, I got a feeling that we could see some further upside to this market. If we start creating those highs, you can see forming a little bit of a consolidation range once again on XAU, and it goes like the four-hour. We’ll see that in a little bit more detail through here.
It’s a very tricky market environment that we’ve seen this week. Nothing is forming those trends apart from a couple of EUR breakouts. Be aware that these markets are consolidating. Be patient, wait for those breakouts before looking for any continuation moves.
Thanks for watching this week. If you enjoyed the content this week, please like and subscribe to our YouTube channel, and I’ll catch you next week. Cheers!
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