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In this week’s Market Outlook, we take a look at the key charts ahead of the election with #USDCAD, #EURUSD , #NZDUSD and more!
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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 look at some key levels of the week in the Forex Market Outlook.
I hope you all had a great Christmas.
So far, we have another low liquidity week ahead of us. So, there’s not a lot going on at the charts. So, we might be looking at key levels on some key charts.
I’m going to start with EUR/USD. The price gave us a bearish week last week. We can’t read too much into that as we only traded two, three days of last week. So, it’s going to be difficult to judge how the markets are seeing things.
But there are two crucial levels I want to point out going into next year. The first level is this resistance where the price has chopped here before and obviously; we’re clearly in this long-term uptrend at the moment where the US Dollar weakened significantly. I could continue with this until the end of the year. I wouldn’t be surprised if the price jumped up towards this 1.2314 level since this was the most traded area in this block.
I’m expecting the market to retest that level and if we do get a retest, I would expect some downside. There are many things that may happen; we might not see the price reach this key level because we have the price making a higher high. And we have the RSI making a lower high on the weekly timeframe, which is a strong indication that we will see some bearish breakdown here. If we see prices move lower, a good level to be watching out for is 1.1831 since this was the most traded level in this particular block here.
If the market starts selling off, then I would expect a pull-down into this area for some support. If the price breaks down past that point, then we would be looking for some further downside. But that’s further in the year.
At the moment, we’re looking to see that the price is approaching the resistance level. We’ve got this resistance or couple bearish confluence that we could see the price dropdown.
I am going on to GB Pound now. So, there’s been some news over Brexit and the fact that a deal has been done. I don’t know the extent of that deals, but there’s a couple of levels to be aware. The price is currently finding a bit of resistance at 1.36.
If I drop down into the hourly timeframe, we can see that the market found resistance over here even after the deal was announced. If we are to see any further details from that deal, we could be looking for some support to come back in at 1.3430 because this was the most traded area last week.
I’m expecting some buyers to step back in at that point if the price was to get to it. We’ll see what happens. But the deal may spark some positivity for the GB Pound. We might see a break of 1.36, or it may be a fact that the rumour sells the news. The market has been pretty strong for the GB Pound lately. And now that the news has come out to say that there is a deal, we could see the price sell-off. So, this 1.36 is going to be an important level at GB Pound.
Kiwi was a chart that we were focusing on last week. We were looking at the fact that the strength and weakness table showed us that the price was at a reversal zone. We see some reversals from that point, and we can see, here, that we didn’t get a bearish weekly close. If we zoom in, we can see that the market gave us that bearish close.
Again, I can’t take too much into that detail last week because it was a low liquidity week. I’d instead start looking at this more towards the start of the year. However, the most traded level of last week was 1.71, a nice psychological level as well.
If we look at the hourly, we can see that the market came into this area a couple of times recently. And if we are going to see that weakness continue, I would expect the market to start trending a little bit lower. This four-hour timeframe has begun to give us a sign that the price will start dropping.
The support that I’d be watching out for is 0.665. Again, the most traded level through this range. So, if the market were to break down, I would expect some further downside.
We could look at the fact that we have this head and shoulders pattern formed. The market has made a nice little left shoulder and head. Is this going to be the right shoulder pattern? Are we going to take the neckline out and break down? That’s something we could look for. But again, it’s a little bit too early to judge that one at the moment.
The final chart we’re going to take a look at is USD/CAD. So again, we look at this one because of the weekly was in that oversold condition. We had a nice bullish week.
I looked at the most traded level between this impulse lower, and it was around 1.3313. If the price was to rally to the upside, we could see 1.3313 retested. The most-traded area last week was 1.2852. So, if we went to that hourly timeframe, and if we were to see the market break away from that point, we could see a little bit of upside towards that key level. Things are looking good here for reversal on USD/CAD, which is what we were looking for last week and if I go back to the four-hour timeframe, we were expecting the change in cycle down here. We’ve got it. Now we’re starting to consolidate a little bit here. If price finds support there, I’d expect it to be looking for a bit of an uptrend to this 1.3313.
I’m going to leave it there. I hope you have a great new year and I’ll speak to you very very soon. Cheers!
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