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 outlook. We’re going to look at a few currency pairs of interest, and obviously the strength and weakness this week is pretty much just showing us that the Yen has been super strong, changing a trend against quite a few currency pairs.
We’re looking for more of that kind of going into this week and the fact that obviously, the stock markets have continued to sort of decline. It’s a very slow decline but has declined which is giving the end a little bit of strength through there. But also as well we’re going to be focusing on those magic currency pairs.
If we’re just going to EUR/USD first. Honestly, we’re still in this area of resistance and range, I should say, actually. So the market is literally just stuck in this zone just through here. I really want to see the market continue to try and break out of this area.
It keeps coming back to lows and keeps rejecting this is mainly due to the Dollar as well, not really pushing through the way we’d like to see it push through.
Nothing’s really challenged for our outlook on the EUR/USD in particular because we’re still just looking for the market to break down. Break and close below those lows, then we can look for the opportunity for the market to pull back in and then continue its move to the downside after a retest of those lows.
Obviously, at the moment we can’t do anything with this market just because it hasn’t broken to the downside.
Be aware that we’re just going to sit on the sidelines. If the market does break and close below the lows, which we are anticipating that the market will do, we just need to wait for two closes below. Which will give us that confirmation that we could then continue to look for that short opportunity.
Going on to Kiwi. Kiwi is an interesting pair. Kiwi remains quite strong, but on our currency strength table this week it’s just suggesting that it’s in an overbought condition. If we look at the top here, the market has rejected the recent weekly highs, come back in, and closed below.
This could be a sign that we could see a little bit of downside to come. We also have a market that is forming a higher high. And the RSI which is forming a lower high currently.
We have a little bit of divergence going on here between the price and the indicator, which could also add to the element of price moving to the downside. I think if we were to see that and the market pull lower, all I’m expecting is a potential re-test of these lows just through here. I wouldn’t extend any further than that until the market breaks down.
Going into the four-hour as well, we were looking for the fact that the market had broken down past this low. And again this is why I always say look for two closes below the low because the market closes below the low which is great, so we’re looking for that potential continuation factor there.
However, the next candle then closes back above and the market continues to rally to the upside. So I always wait for two lower low lower closes or at least two closes below the previous structure point, because that will give us the opportunity then to confirm that break of that low. And it eliminates the potential false breakout which is what we’ve seen here on Kiwi markets rally to the upside we’ve closed back within.
So again what I need to see here is some kind of double top pattern if we get some kind of double top pattern in here. So the market’s pulling back down at the moment. So looking for the potential market to retest and then break to the downside. We could be looking for then for some short opportunities. But until that kind of four-hour cycle changes, we’re just going to sit on our hands again with this one.
Same as, a little bit similar to the kind of Aussie the fact that we’re already in this, but the fact that the market is kind of struggling to make any kind of higher highs here is a good thing for us. We’re looking for the market such as target a little bit lower. Obviously, the trend isn’t on this because I’m using a different platform here at the moment. I’m just on my kind of travel kit at the minute, so if the audio is a little bit different I apologize as well.
But essentially, the market is finding some resistance just up here. And I want to see this market pullback down into these lows there. Again just kind of following that same process that is closing bearish is that four-hour trend. Something that we can identify with and potentially try to the downside.
Now, this did give us two closes below this previous structure point in here, which is what we’ve been looking for. So if the market can continue to sort of break to the downside, it’s looking more likely basically than NZD/USD at the moment.
Pound, also an interesting chart that we can take a look at just because if we zoom right out and drop a line just around about the 1.3 area, which is just through there. Then we can look at the fact that the markets pull back into a key level starting to reject that key 1.3 level.
If I go to the four-hour time frame here, we can see that the market is potentially forming a double top pattern. Can we break and close below these lows and continue to try this market short?
That’s what I’m going to be looking for going into next week. Same with USD/CAD, really, it’s just range bound. We were looking for that breakout earlier in the week. It looked like it did it in the four-hour time frame, which gave us those two closes above. Pullback in the market starting to push a little bit higher now. But I really want to see this momentum and push to the upside. I haven’t quite seen that yet, but I’m expecting that to continue to follow through–just need to be a little bit patient.
CAD/JPY is breaking nice, and this is one of the sorts of Yen pairs that are really nicely forming lower lows now. If I just bring in this zone through here. The market has found resistance, support recently. Now we’ve had three confirmed closes below that low happy to look for the shorts on pullbacks. So if the market can pull back into this zone just through here, I just need to adjust the zone slightly through there.
If the market can pull back into this zone form that really nice daily bearish candlestick formation, then we’ll look for that shorting opportunity from this zone through here and continue to look for that trend to develop through there.
Another market on the Yen side of things which is looking kind of good– EUR/JPY has actually broken to the downside, give us three confirmed closes below this low as well. You can see the almost head and shoulders pattern here with the left shoulder, head right shoulder. Looking at the neckline sort of area now, we’ve got this sort of zone just through here.
If the market can kind of pullback, give us some bearish candlesticks again, even if we kind of look at it from a four-hour point of view. Apologies didn’t mean to do that. If we look at it from that sort of four-hour point of view, if it will load up for us. Here we go. Then we may get a bit of like a move back up, a rejection of the zone or maybe even a force break out of this high just in here, which could then produce a short opportunity for the market to go to the downside.
So that’s what I’m kind of looking for here on EUR/JPY this week. Some good charts to look at, some nice trends potentially starting to form now. Keeping on these Yen pairs and I’ll catch you in the next video. Cheers!
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