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The #ForexMarketWrap is here!
Watch the video to learn what key levels have been hit this week!
In this Forex Market Wrap, we’ll highlight charts of interest in the Week Ahead Analysis (July 12, 2021), see how they played out, and what could happen next.
EUR/USD
We expected some downside on the USD, but that didn’t happen. We had strong CPI and PPI numbers, which helped boost the USD this week.
However, the price is still trading within last week’s range on EUR/USD in the weekly timeframe. This shows us that there are still some buyers waiting for low prices to come in before bouncing. If the price closes within range, we would have three candlesticks closing within each other’s range, which could drive the price to move upside.
EUR/USD didn’t rally as we anticipated as the USD data was good. It pushed the market towards the major swing level at 1.1800. If the price closes there, we can expect a reversal because it will then be three weeks of candles closing within each other’s ranges. This often leads to a reversal in the market.
For EUR/USD, I think the 118 level is going to be key. If we stay above it, we could trade higher. If we break below, it could be a sign that a downside will happen. The 118 area will be crucial in predicting which direction the price could head.
USD/JPY
We had a large break out of the USD/JPY trend. The market was moving to the upside, and then it broke out of previous structure lows at the 110.40 level. We talked about how if the price goes up to that zone, we could start looking for short opportunities.
The price moved down, went towards the previous structure lows, and it looks like the Yen will strengthen slightly.
The USD/JPY price found sellers at the resistance level at 110.40, but it failed to break the lows. The JPY will likely remain strong against other currencies, but it could range against the USD.
There is nothing in the weekly timeframe that would suggest buyers coming back in the market. But, if the USD weakens next week, we could break the current weekly lows and see the continuation of the downtrend.
AUD/USD
Finally, we talked about the potential of AUD/USD to find some support and move to the upside. This was a reversal currency pair. Reversals are less likely to trend continuation opportunities because the trend direction usually dominates the market.
However, the price hasn’t closed below last week’s low yet. It is still trading within last week’s range, and if the price forms a strong bullish move and breaks above the 0.75 high, then I would expect some upside towards the 0.76 level next week.
The price of AUD/USD remains high on the watchlist as the price remained bearish due to the drop in the stock markets. If the stock markets start to recover, we could see a break of 0.7500 and a move higher.
Low ranges and candlesticks trading within last week’s range are usually good signs that a momentum shift is about to happen. So, we need to keep our eyes open on AUD/USD.
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