In this week’s Market Outlook we take a look at the #EURGBP, #EURUSD, #AUDUSD, 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 be breaking down a few charts of interest and key levels we will be watching this week on those particular markets.
The first thing I’d like to do is start with the heat map or the strength and weakness chart. What’s interesting to see from the strength and weakness chart is that the safe-haven currencies are gaining some value. We’ve got the US Dollar here, the Swiss Franc, and the JP Yen. They’re all showing signs that they are gaining value, suggesting to us that risk-off could be the sentiment driver next week because we also have risk currencies such as the CA Dollar. You can see that I’ll have to put it over them this side. The CA Dollar, Kiwi Dollar, and Aussie haven’t moved that much. But those risk currencies are starting to lose value as well. So, maybe we’re going to see a little bit of risk-off next week with the US Dollar gaining some value, some Swiss Franc, and some JP Yen gaining some value against some weaker currencies.
Now, the GB Pound’s weakness is a focus for us. It looks like it is going to continue to get weaker. It lost quite a bit of value. It’s one of the only trending charts. I’m going to be looking at GBP/USD, particularly GBP/JPY as well. But the GB Pound is the weaker currency that we’re looking for and maybe some weakness in the CA Dollar as well.
Jumping into the charts, we’ve got the US Dollar Index here. We can see that the price is pushed to the upside. It’s going to be interesting to see what happens with this week due to what happened. Essentially, lots of sellers are involved, lots of buyers involved. The market is still pretty much in those ranging environments. We need to see a bit of trend coming out of the US Dollar Index. If we get that break of a high, maybe, the price looks likely to test these swing lows here, which could create a bit of a trending market on our major currency pairs.
The only major currency pair in a trend is the GB Pound, and we can see that the market is forming lower lows and lower highs. We’re currently testing the key structure lows, save posters breakthrough, and looking for the same thing again: a pullback and a continuation down into the next structure lows on the GB Pound. We may get a rally from here, but this will depend on what will happen with the US Dollar. If the market does rally, then we could still look for that short from the highs, or if it breaks through, then look for longs.
At the moment, everything points to a downtrend. The strength and weakness is suggesting that this is going to continue to break out to the downside. So, I’m going to watch those short positions on GBP/USD.
EUR/USD is around your market, nothing to do here. Same with Aussie; If we do start seeing that risk-off sentiment with Aussie, we could see a breakout of this little range. We’ve got it here with a breakout to the downside. That’s something to keep an eye on. But, the price hasn’t retested those lows yet. I’m waiting a little bit longer to see what happens at those key structure lows there.
Kiwi is very much in a little short-term range at the moment, between these two points. Is the market going to break to the downside? Again, this is all going to be determined from that risk-off sentiment. If we do get a break to the downside, start looking for short opportunities there.
CAD’s a little bit weaker. I quite like USD/CAD long because if we look at this weekly timeframe, the price is quite clearly in that pullback phase. Could it retest these previous weekly lows here? If so, we could be looking for those trending environments again. Even if we look at the four-hour timeframe, we can see that the price did a double bottom, broke, and now we’ve remained on that flag pattern. We break to the upside. We have to retest the highs and break to the upside. Again, if you start seeing a bit more trend out of this market in the four-hour, we can look for those buying opportunities there.
One chart of interest that I like the look of is EUR/GBP. We spoke about this a while ago, and it was on our radar for some long opportunities. I’ve already marked out a little bit about what I wanted to do here, so I’ll go break that down again.
If it’s against that daily timeframe, we can see that the price makes higher highs and higher lows. You can see, we’re making higher low there, making some higher lows here and now, we’ve made a bit of higher low there as well, and a higher high there. The market has quite clearly trended to the upside. When it does trend to the upside, we will look for areas of resistance, and you can see, here, that the market found some support in the past. That leads to me saying that the price is likely to come and retest this area once again. The market is pushing to the upside.
The next step for us is to dive into that four-hour timeframe; is there a clear trend? Yes, there is. We can see, again, that the market is making those higher highs and higher lows. It pulls back, it retested the structure, and now it’s rallying to the upside. Is that going to happen again? Are we going to pull back, retest these structure highs here, then continue to the upside? What I did was I pointed out this zone in particular, with the candlestick highs and the bodies as a buying area for us.
Now, that’s going to remain until the lows are broken, which is currently here. As long as the price remains above this swing low, there, I’m going to look for buying opportunities on EUR/GBP up into this key area of resistance which we found on that higher timeframe. EUR/GBP is looking pretty good.
Another chart I quite like, which looks very similar, is XAU. So, XAU was one that I’ve pointed out at the end of the Forex Market Wrap video. It looks to me like maybe the price has started to find some buyers already and that we can see that the market is in a bit of a range here, but we had a bit of a breakout closing above that previous high. The market has now pulled back, it looks to be on its way again. But, I do quite like the idea of buying XAU if we can get another retest of this previous structure high. If we don’t get another retest, then I’m not going to trade it. Immediately, I’ll look for another break and retest another key zone. So, maybe this swing high, here. But, I do quite like the idea of some XAU buying now, especially with this buy zone down here. As I said, if the market can pullback down or maybe double-bottom or anything like that, that’s a good sign that we could start looking for some buyers to come back in here.
Keep an eye on XAU. It could be the one to watch for the week ahead. It also leads us to look for a bit of downside, maybe to the stock markets, because of that risk-off sentiments. If we look at the DOW, for instance, down the four-hour is very much pushing down. Weekly was a bearish close. Are we going to start seeing that daily trend to the downside?
Now, we’re going to have to see that we don’t have the daily downtrend yet because we need a lower low to be formed, and that would only form if the price can break through this structure low here. So, if we do get that, we can start looking for short opportunities on the stock markets again.
So, remember that trend is key. Our goal is to find that trend. Look for those trending markets such as EUR/GBP. Look to trade those markets in areas of support.
I hope you enjoyed this Forex Market Outlook video with me, John Kibbler, Head Currency Analyst. If you did, give the video a thumbs up and subscribe to the YouTube channel for more trading content. Thank you.
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