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In this week’s Market Outlook, we take a look at the key charts of the week with #NZDUSD, #EURUSD, #NZDCAD and more!
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we’re going to look at the Forex Market Outlook, highlight the strength and weakness of currencies, and the trending pairs to watch the week.
Strength and weakness chart
First of all, we’ll be starting with the strength and weakness chart. We can see that we have several opportunities.
EUR has taken a dive this week, and so has the NZ Dollar. This is interesting mainly because the Kiwi was at that high strength on the strength meter a while back. Now, we’re starting to see that completely reverse. So, we’re expecting a downside on Kiwi.
CAD is the strongest at the moment. It’s considerably stronger, pretty much straight-lining. I don’t see it slowing down. The trending pairs this week are going to involve a lot of CA Dollar pairs.
Also, the Swiss Franc has started to regain a little bit of strength. We can see here that it’s going to move from minus seven to minus four. We’ll focus on the Swiss Franc this week.
Strength meter
So, let’s have a little look at the strength meter to confirm what we’ve been talking about. We can see that the CA Dollar is moving to the upside, and it has now crossed multiple currencies, including the GB Pound. We will be looking for that CAD strength to continue and some downtrends to form across some CAD pairs.
We’re going to take a look at NZD/CAD and at AUD/CAD, which is this grey line here.
EURUSD
Let’s have a little look at the EUR first. EUR is an essential currency pair to talk about, and last week, we spoke about this area in 1958. It was an area where the market found a little bit of support.
Last week, we had mixed news which created this almost low range-bound week with the market cap between these two points.
I’d like to see a breakout this week and see the US Dollar strengthen further, which is the opposite of what the Fed was talking about. Still, with the bond yields continuing to rise; it only looks like the US Dollar will potentially continue that rally.
With the EUR dropping off, what I’ll be looking for is a break of trends. So, if the price breaks to the downside here, 1831 is going to be the target for us. We could also see the price come back down into these lows on EUR/USD if the price can break through that high volume level.
Keep an eye on it this week. The risk is to the upside. If the price were to break higher, then we’d see some further advances to the upside.
With the strength and weakness showing us that the EUR is taking a bit of a dip at the moment, we should see a potential breakout.
NZDUSD
Kiwi is an interesting one as well. We spoke about this last week and the fact that we had this head and shoulders pattern. We’ve come up into this volume level of 7252, rejected, and now, it’s closing lower.
I like this 0.7013 area as a target for those selling opportunities. What I’m going to be looking for is to sell this market on breaks of trends.
At the moment, we have this significant move and a bit of an indecision candlestick. We spoke about how if the market were going to close below this 23.6 level, that could signify that we are going to get that change of trend. You can see hereafter, the market came and formed a lower high, and we started to push a little bit.
I’ll be watching for a break of this Doji candlestick. If the price closes and breaks the Doji lows, we will see some further downside on this pair. We’re going to see the price towards that 7102, which are these lows here.
If the price can break further out of that, then we’ll see some further downside. And with the Kiwi weakness coming in, I wouldn’t be surprised if we were to see that breakout and a move lower.
AUDUSD
Aussie is a bit different in terms of the price already retested this area once. It came back and rejected it again, forming this double-top pattern on the daily timeframe.
The key lows are going to be down in this area. If the price can break through this area, it’ll be good for some shorting opportunities.
We can also look at the early trend line break here. If the price can break through this trend line and close below, that would be an interesting opportunity to see if the price can trend to the downside.
I quite like this moving lower because we’re looking at NZD/USD breaking lower as well, but the AUD/CAD trend looks pretty nice here.
AUDCAD
So, moving on to AUD/CAD, one of the trending pairs of the week. We can see that the weekly is largely in this uptrend and that we’re in a retracement phase of that uptrend.
In those retracement phases, we are on an uptrend. We’ll likely see downtrends forming from the daily timeframe, which we can take advantage of.
I spotted this level on AUD/CAD, which is 9542. This is a high volume level. What I mean by that is there was an accumulation of price in this area. Institutions are mostly buying at the 9542 level. We knew that they were buyers at this point because the price has broken to the upside.
So, if the price comes back down to this area, are they going to defend that level?
This is an excellent place to target the market for this move because we’re likely to see this area tested or this high volume tested.
Daily timeframe
Going to the daily timeframe, we can see that we have nice opportunities on-trend in that weekly retracement phase. We have the market making lower lows and lower highs and prices currently stumbling on this previous structure point.
What I like to do in this area is look for that breaking trend. For instance, if I were to go down to a four-hour timeframe, I would typically look for a breakout of any changes in cycles.
When the daily timeframe is in that downtrend scenario, what we’ll see if the four-hour matches it and starts to make lower lows. The market will likely continue that impulse phase. When we get that pullback phase, the market then breaks the trend through here. In this instance, it was a little head and shoulders; then the price broke to the downside.
We’re looking for something very similar, which we’re getting at the moment. The price is breaking trend here. We’ll see if that can follow through and breakthrough these lows. It would be nice to see a continuation down to 9542.
That would be my outlook on AUD/CAD, it’s very similar on NZD/CAD as well. The price is largely in this uptrend here. Are we going to see the price come back to the most traded level within this candlestick block? 8775 or 8776 is the level of interest here.
What I like about this one is it has been used as support and resistance in the past. This is a nice level to watch for the price to come into.
Daily charts
The daily chart is getting that nice trend line move and nice lower lows and lower highs. We’re looking for that continuation at this point. So, again, what you can do is dive into that four-hour timeframe. Have a look at how the price action is forming on the four-hour. We see the price breaking through these trend line areas and continuing to move down.
At the moment, we have a little bit of a box going on. I would like to see if the price can break to the downside on this. It shows us that sellers are still active in this area and could look to trade the price down to that major swing level.
So, 776 will be the target on NZD/CAD if we get a breakout of this zone here.
Thanks for watching this Forex Market Outlook. I’ll catch you in the next one.
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