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For today’s Forex Market Wrap, we’re going to identify some key moves in the weekend, focusing on the US Dollar.
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We know that it’s a bad month for the US Dollar. The first two weeks of April were bearish for the US Dollar, so we need to know if that will continue, and if it will, we need to know from where.
I’m expecting the weekly momentum to push the price further down back towards recent swing lows on the weekly timeframe.
Daily timeframe
If I were to go to the daily timeframe, I would think that the price will come back down because the buying reaction in the past has been strong recently.
That leads me to think that institutions have been buying from the 90 area, which will create a nice level of demand. That’s where we’d want to buy the market too.
These demand and supply zones can act as magnets for the price. I’d expect the price to eventually end up back towards this demand zone at 90. Buyers can step back in, which would coincide with the seasonal pattern of a bearish US Dollar and then rally come May.
I would like to see more downside on the US Dollar. However, there might be some support and resistance levels in the way. The first one is where the price is at the moment.
Four-hour timeframe
If I were to highlight this demand zone, we could see strong buying activity. We also have a nice rally up and a continuation of the consolidation.
We may see a short-term pullback on the US Dollar maybe back to the 92 area. If the price breaks lower, then we could expect a continuation down of this trend throughout April.
It’s another bad week for the US Dollar. Let’s see if that continues next week.
The USD has continued to perform poorly in line with the seasonal bias, despite relatively good data. This could continue further as we see a large zone of demand resting at $90. We know this is a demand zone due to the aggressive buying at this level recently. If the market continues in line with the bearish seasonal period, then this would make likely targets for short opportunities.
EUR/USD
Moving on to another chart, EUR/USD coincides with the US Dollar Index. We’re at a supply zone in EUR/USD, line with the demand zone on the US Dollar Index. This could be seen as a downside to the key support of 1.1992.
But it’s a good strong week for EUR/USD, and it looks set to continue.
EUR/USD performed well this week and it will likely continue with the USD weakness. If the price retraces, we could see a higher low form at the recent support zone at 1.1892. The EUR looks strong against a few of its counterparts which will make for an interesting Forex Market Outlook next week.
Weekly timeframe
If I go to the weekly timeframe, there’s a very strong bullish weekly candlestick. If it closes like that, we are going to have another strong week. I would expect further upside in this particular market.
NZD/USD
Moving on to Kiwi, it was one of our triads of the week. We spoke about buying it out of the consolidation zone up to the supply zone because of the retail sentiment leaning towards short positions.
Usually, retail traders are on the wrong side of the market. They would have been punished in a move to the upside into the supply area.
There’s a bit of selling activity if we go down and retest this consolidation zone for further long.
NZD/USD moved in line with our forecasts. It rallied up to the supply zone at 0.7170. The price broke out of a consolidation earlier this week as retail trader data suggested that the retail market was adding heavy short positions. Typically, retail traders are on the wrong side of the market. This would lead to a breakout to the supply zone.
That’s what could potentially happen but I have to wait and see. With Kiwi, it actually had a pretty good week compared to other currencies.
We’ll identify whether there are any further opportunities on the NZD/USD in the Forex Market Outlook next week.
GBP/CHF
In this week’s Forex Market Outlook, we spoke about the opportunity to try and short GBP/CHF if we got decent pullbacks. In the end, it didn’t do so.
However, it did react to the demand zone that we pointed out. If the price were to react, we’d expect a bit of a pullback. We were looking for a pullback into 1.2794, but it didn’t occur.
But it did come up to the 1.2754 level and reacted from that point.
So, the GB Pound had a mixed week. One minute it was down and now it’s starting to turn around a little bit. This is the reason why we’re seeing a consolidation on GBP/CHF.
There’s a demand zone in GBP/CHF, so we have lots of buying and selling going on. We also have a range, so we need to determine whether we’re going to break out to the downside or the upside.
We also need to identify triads and opportunities. There would be a heavy supply zone at 1.3000 because of the strong selling activity.
This suggests that there were a lot of institutional buying and selling going on at this point. I wouldn’t be surprised to see the price move back up for another short.
With GBP/CHF, we expected to see a continuation of the downtrend. Both currencies ended up having a mixed week which led to the market forming a range. This was supported by the demand zone we pointed out in this week’s Forex Market Outlook video and would need to break out to see continued selling pressure.
The origin of the move came from the consolidation at 1.3000. If the price were to get back to this point, we could expect further selling activity.
I hope you enjoyed the content this week, and I will speak to you next week. Have a great weekend
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