FOREX MARKET WRAP: 2nd October
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Hi guys, and welcome to this Blueberry Markets video update with me, John Kibbler, head currency analyst.
In this video, I’m just going to go over the forex market wrap, talk about what’s happened this week in the markets, and what could be potentially setting up for next week.
I’m seeing that much out of the markets apart from a little bit of Dollar strength. A little bit of surprising news today caught the market by surprise, and we saw a little bit of risk-off coming to the market with Donald Trump being announced that he has tested positive for COVID-19. Which sent the Dollar a little bit stronger, Yen a little bit stronger, and the S & P a little bit lower.
It recovered quite quickly. However, we had NFP job numbers today as well which is a bit of a mixed bag. Nothing there really to kind of sink our teeth into, so it’s been a little bit of a quiet week, and we’ve been looking for that Dollar strength to continue, and the price has just retraced this week.
Taking the EUR/USD here for an example. We were looking at this head and shoulders pattern. We were looking at that price-cam into the neckline area, and we were really expecting the Dollar strength to re-enter the markets and push the markets lower. However, we haven’t seen that on this currency pair. We have seen a couple of daily bearish candlesticks in this area of resistance. However, It’s looking good for that continuation, possibly going into next week.
So, looking good here for some further downside. I’m going to be sticking to that four-hour time frame and really want to see the trend develop here. If the market does break to the downside, we’re going to have some nice trades and opportunities going into next week. But nothing’s really changed in regards to the strength and weakness of the US Dollar at the moment. Still very much stronger than most currency pairs, still very much in trend against most currency pairs, so looking for that to continue.
One pair that was a kind of against the Dollar buying was Pound. Again Brexit news has kind of chopped this market up and down this week. And really speaking, what put me off looking for any kind of short opportunities on the GBP/USD this week was the fact that we were back trending into these previous structure highs.
Now, typically when I look at the trend, I look for the market to bounce off of previous structure highs as it was previous resistance acting as potential support. And we can see that right here the market’s making higher highs, breaks out, it comes back in. It’s a little bit of a sticking point here on GBP/USD at the moment.
The Pound obviously gained strength last week, so we said it’s on our list not to really look for shortened opportunities on Pound, looking more to maybe even buy the Pound this week against those weaker currencies. But nothing really formed here in the end, so not too fussed about anything that’s going to go on here. I think we need to be patient with Pound.
One market that we did like the look of which we have been triggered into is the Aussie-US Dollar, Aussie, and Kiwi Dollar both two of my favorite charts at the moment and again we were looking for the market strength of the Dollar to come back in and break the downside.
Now that early morning news really pushed prices to break the daily low which is typically like the look of, if I go to that four-hour time frame just really waiting for that key breakdown. Yes, I explained I want to see that sort of daily bearish candle close and that four-hour trend change through here. But at the moment, you know, just kind of looking at this.
What I was expecting was that if that daily candlestick did break lower. Are going to see a continuation push down through here? And at the moment, we haven’t seen that. The market is at the moment sticking with its trend. It’s making higher highs come back into this level here which is the one that I wanted to see break and close below and find a little bit of support. That is not to say that I don’t see this market breaking down.
I think you know this market is going to break down. I’m expecting this market to break down. But let’s just see if it can break through those lows here. Look for a pullback, look for a continuation. And then hopefully we can look for some add-in trades as price moves back towards that 0.7 level but still like they’re looking for this market through here.
USD/CHF, as well we spoke about the fact that it’s back at this supporting high, just hanging around here. It’s not really doing much here at the moment. I still like long opportunities on this. I think we’re going to see a breakout. I was expecting a double bottom breakout but looks to me like we’re just consolidating here at the moment.
I like the fact that the market’s made lower lows, and we’re making higher lows on the RSI. Showing us a bit of divergence here between the indicator and price, so I’m happy to continue to look for the buying opportunities on this gain, waiting for that four-hour trend to continue to look for further buying opportunities on USD/CHF.
EUR/JPY as well just about triggered us on this candlestick yesterday was a bullish day. Resistance held price broke downside obviously with stocks moving lower as well like this market now because we’ve had that change in the cycle in a four-hour time frame.
If you look at these lows here, we’ve had two successful closes below those lows. I’m expecting that market to continue to push the downside now. The nice change in the trend of a four-hour time frame continues to look for this one going into next week. Really like this market to push lower.
That kind of coincides with the S & P finds a little bit of resistance as well. Four-hour hasn’t changed the cycle here just yet, but the daily is kind of struggling here. Are we going to see another maybe push back down into these lows before seeing a longer move to the upside? But essentially not much going on this week.
I quite liked the idea of still buying the Dollar and buying Yen just waiting for those decent opportunities to form now.
I hoped you’ve had a great trading week, and I’ll speak to you soon.
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