FOREX MARKET WRAP: 19th Feb
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Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we’ll go through the Forex Market Wrap. We’ll to identify the markets we’ve looked at this past week and see what happened to them.
We started the week by looking at some GB Pound pairs, and going over to GBP/USD, the area we were looking to buy from was back down at this area of 1.3856. That turned out to be a good opportunity in the end.
So, the price was making this nice uptrend. We were making higher highs and higher lows, and said one or two things will happen: either we’ll see a daily pullback towards this 1.3755, where I’d want to be a long term buyer again, or the price could react from these previous structure highs as support for a long position up into 3977-3980.
We wanted to target this area because there was this nice block of candlesticks on the weekly timeframe, and the point of control through that area is 1.3977. That suggests that it is the most traded area within that block of candlesticks. That makes a good target for the market, and you can see this uptrend continued into that area. Now, the price is in that area. We need to wait and see what happens to that. But, there’s a nice trading opportunity here.
And we didn’t talk about GBP/USD. We spoke about EUR/GBP and GBP/CHF.
I did want to see a pullback into 0.8756 because this was a nice area of low volume combined with previous support. I was looking to see if that could turn into resistance. However, that didn’t happen. Instead, the price only pulled back up into this structure area and decided to press lower.
But if you were selling this on a different type of strategy, then again, use strength and weakness here.
The EUR, as of this moment, was at that resistance level and was pushing to the downside. The GB Pound was at support, finding support, and pushing higher, which causes this sell-off on EUR/GBP. Again, good use strength and weakness to identify where a trend continuation point.
Another market that we looked at was GBP/CHF. We expected it to move to the upside. Again, the Swiss Franc was weak and what we discussed in the video was trading GBP/USD versus USD/CHF.
What we explained was the fact that USD/CHF was at neckline support and that it could start finding some support, or some sideways movement at this area, which is what we want to see for a buyer of GBP/CHF, and the fact that the GB Pound was at a support level made us think that we could buy the GB Pound still.
That’s what makes us look at those cross pairs and see where we can take advantage of things.
We discussed this one or two levels: we discussed this previous structure low area, where we said the price found resistance multiple times. It’s also found support, here. If the price were to pull back into this level, that would be a nice area to look for a long opportunity, or if the price could hold above this area and find support, then we could look for longs around this area.
So, GBP/CHF is finding longs at this previous structure high, there. Again, nice use of looking at the strength and weakness of the currencies to identify key opportunities.
Another market we focused heavily on was EUR/USD. We spoke about the fact that the market found some resistance here and that we could see the market push to the downside. But, we had to be careful, though, of the potential for the market forming an inverse head and shoulders pattern, which it looks like it’s starting to do here. It formed a false breakout in this area 1.2061 around here, where the markets found support here in the past.
It looks like it’s happening again, and if the US Dollar continues to sell-off – which is not something we were looking too much into – but if it does break above these highs here, we need to switch our bias and think that the price could be heading back towards the major swing highs on EUR/USD.
We’re still below this 2165 level. Let’s see what happens if the price gets back to that point. We’ll discuss this further in the Forex Market Outlook on Monday. But, we’ll go through that in more detail.
Again, we looked at the fact that in the four-hour timeframe, what we would have wanted to see was two closes below these lows – we did get that. Unfortunately, we didn’t get the pullback. I was hoping to see the market pullback from this area here, then retest. That would have given us a good short opportunity at this level.
It didn’t happen. Instead, the price then pulled back up, retested this structure low here, where the market found support, support, but didn’t allow us to jump on the short trade there. In fact, it bounced off that 1.261, which is what we said the risk is to this market.
A good couple of markets to watch this week. The GB Pound has been good to watch recently.
I hope you’ve enjoyed the video updates this week. If you have any comments or questions, please let me know in the comment section down below, and I’ll speak to you soon.
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