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Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we’re going to take a look at the markets this week and analyse what happened. For the majority of it, we’ll talk about the US Dollar strength we’ve seen come back into the markets.
We were looking for the potential of the markets to come into some real key areas. In particular, the US Dollar, especially the 10-year yields, have come up in some key areas, which pushed the US Dollar very strong.
We spoke about this on EUR/USD earlier in the week, where we looked at the four-hour timeframe,. At that time, we wanted to see a couple of closes below this zone here to look for the market to break lower.
Unfortunately for us, that didn’t occur. Instead, we had a rejection here, and the four-hour uptrend continued, breaking past the major swing level that we’re talking about.
It’s what we are also looking at in the higher timeframe. Analyzing the daily timeframe, we can see here that the market closes back within this key area and also closes back within yesterday’s range. It’s what we looked at on the Blueberry Jam for a short opportunity in here. Targets are currently down around this area, and the price is well on its way.
Seeing that rejection there, seeing that the US Dollar strength is coming back to the market, we could see this last longer and see the market come back and trend back towards this area here on EUR/USD.
I’m happy to look for the continuation short,, and I’m happy to buy the US Dollar.
I think one place which will look pretty good is AUD/USD. We’re looking to continue the uptrend on Aussie because of how strong it has been. But, we noted that 0.8 was a key level of resistance, and the price came up and tagged that area. Since then, the price has been dropping to the downside.
What’s interesting here is the way the weekly is currently setting up. We had the break out of this high, and now the price is closing back within this high.
That could lead to some further downside for the Aussie. Potentially, back down towards these key lows. If it breaks beyond that point, we could get further. That is depending on how the stock markets are doing. Stock markets are currently declining, and that’s going to have to do some US Dollar strength as well.
But at the moment, the price is moving heavily to the downside. We need to wait and see how the price reacts to this. We had a quite decent reaction from this level, but then the price sunk completely, taking those lows out here.
We need to be cautious of the volatility here. A lot of US Dollar strength is coming back into the market. We’ll look at the Market Outlook to see how the US Dollar has performed and see if there’s any position surrounding that.
We are looking at the weaker currencies as well. The JP Yen has poorly performed against the US Dollar this week and probably the worst out of most of the pairs. We can see that the JP Yen weakness continues as we broke into these highs and formed this area here.
So, the price is completely falling on the JP Yen. I expect that to continue. That’s caused by the Bank of Japan talking about going further into negative interest rates, and before that happens, we see a sell-off of that currency.
I hope you have a good trading week, and I’ll speak to you soon.
We hope our Forex Market Wrap analysis helps you in your trades. Practice trading the USD/JPY and AUD/USD pairs with free $50,000 funding when you sign up for a free demo account at Blueberry Markets.