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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 look at the majors and see what’s been going on.
We were looking at the US Dollar index at the start of the week, and we were looking at the fact that the price had come into a key 92 US Dollar level.
Now, that’s been pretty important all week, and as we can see on Monday, the market came into that 92 US Dollar area, rallied up, and it looked to be that the US Dollar was going to start gaining some strength. However, we came back up into some previous structure highs, which is this 92-70 area, rejected, then the market fell all the way back down, and retested 92 US Dollars again. This was the area where we said that if the market can trade below, we’d expect the US Dollar weakness to continue because we looked at the seasonality reports, we looked at the fact that through November typically, the US Dollar finds a top and falls through to the end of the year. We can see, here, that despite that nice rally that we saw in the markets, the US Dollar has continued to fall away and rejected this level on numerous occasions. It has finally broken through this 92 US Dollar level now, and it looks to be moving towards the downside. The markets are not closed yet, so we need to see how the market closes at this level to best look at where we could go from there. But 92 has been such a huge level for the US Dollar, and now that’s causing this breakout and has caused some major currencies to continue to move.
So, Looking at NZD/USD, we were looking at the potential for Kiwi to react to this 0.69 level and potentially start pushing a little bit lower and potentially come into these previous structure highs, here. But the markets completely ignored that US Dollar weakness, continuing like so has pushed prices to the upside, here.
If we go to the daily timeframe, the price hasn’t really looked back this week. It just continued to push higher.
The next stop now for Kiwi is to be head up towards these major resistance levels, towards 0.7050 or even up into the 0.7200, which is a big level as well.
But seeing this breakout, here, just shows us the potential for the US Dollar to continue to weaken. So, we have to be a little bit cautious about how we look at the US Dollar going into next week, see if we can get that downside continuation. But, Kiwi is very much the stronger currency of the week at the moment.
Euro hasn’t had the sort of same strength that we’ve seen in Kiwi. But nonetheless, it’s still sort of breaking out of these key levels, this 1.19 level, which kind of coincided with that 92 US Dollar level on the US Dollar index, which is also being broken at the moment. If the price stays the way it is, then we’re likely to see further upside to come from this market. We have to be a little bit cautious here at the moment, just because we are heading towards making higher highs and the RSI looks to be making a bit of a lower high at the moment. We have to wait for a bearish week in order to determine that factor. But at the moment, the US Dollar weakness is pushing EUR/USD prices higher that could continue going into next week as well.
So, we looked at taking a couple of positions. GBP/AUD is moving okay at the moment. Just looking at that daily timeframe – there’s nothing really here to be too concerned about. The prices continue to push lower towards these lows, through here.
Obviously, we’re coming into the weekend now, so we need to manage these positions whether we close the position out or not. Look to continue or look for a pullback going into the next week, which I think is probably going to be the best thing here because we have this little channel that the price is finding some resistance or support at the moment.
So, we’re just going to take and close this position. We’ll look to see if it can break out going into next week. NZD/JPY’s divergence didn’t play out even though – look at that Kiwi strength, the NZD/JPY hasn’t really matched that – which is interesting to see. So potentially, we can just delete this order and look again next week.
EUR/CHF was one that we were looking for the market to break to the downside. It did start breaking quite nicely. However, the prices pulled all the way back. The four-hour is still looking good. We’re going to hold this one, we’ve got quite a wide stop-loss on this one so this one is going to be okay to hold.
But essentially US Dollars is the big talking point, we’ve got a US Dollar index at that key 92 levels. Can it hold below? if it does, where is it going to go next? And how’s that going to impact our major currencies going into next week?
I hope you enjoyed the content this week, and I’ll speak to you soon.
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