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The #Forex Market Wrap is here!
Follow the link to learn what key levels have been hit this week!
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Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
In this video, we’re going to go through the Forex Market Wrap. We’ll go over key levels of the week and discuss what’s been happening in the markets.
The big news this week was FYMC rights. During the press conference, we saw Fed chairman Jerome Powell being very dovish on the US Dollar. I talked a lot about the fact that they’re not going to hike interest rates until 2024, which is a huge dovish statement, and we saw the US Dollar sell off quite aggressively from that.
However, bonds have remained pretty strong. Typically, when the bond market is moving higher, we see the US Dollar supported.
That’s what we’ve seen at the moment. We’ve seen a little bit of a divergence from what the Fed is talking about and what’s happening in the bond yield market. We also started to see some interest in price action.
EURUSD
It’s been a mixed week. If we take a look at EUR/USD and go to the weekly timeframe, it is looking like it’s going to close bearish this week.
However, there’s not been much range in terms of the size of the candlestick and the movement. We’ve had a lot of range-bound movement and lots of volume entering the market, but we haven’t seen any momentum, which is swaying us in either direction.
This 1.1957 area seems to be where the market’s capped at the moment. This major support at 1.1831 could be something that can be retested again next week.
This is a huge level on EUR, and if we were to see the price come back down to this point, I wouldn’t be surprised if we did start to see the US Dollar sell coming in once again and the price moving back higher.
At the moment, we’re having this accumulation. We need to see or a breakout here to be on one side of the market or the other.
So, EUR/USD is looking fairly flat here, and we spoke a little bit about this across the board.
NZDUSD
We talked a little bit about Kiwi and the fact that we could be forming this head and shoulders pattern. We also talked about how if we do get a close back within this previous candlestick range, it could show us signs that the price is going to start moving lower.
If we look at the daily timeframe, the price came up to this high volume level. It’s still technically making lower lows and lower highs, and we’ve come back, retested that structure, and the prices have been driven lower.
If we are to see anything on Kiwi’s weakness, maybe it’s something to have a look at. But looking at this, we’ve hit that key level; the price is now dropping.
I would like to see the prices down to 7013. That’s because if we take a look at this weekly timeframe and if this head and shoulders were to play out, that looks like the most obvious place for the price to find some support. We have previous support here and it’s the most likely target for long-term players in the market.
XAGUSD
Silver was something that we spoke about. We were looking for more downside. Technically, if we’re looking for some downside on Silver, we’re looking for some US Dollar buying.
We haven’t seen anything. Again, it was a very flat week. Nothing is really going on, the price is rejecting this resistance level, but it’s not breaking to the downside either.
We need to be patient with any movement here. The reason why we were looking at this in the first place was that the retail sentiment suggested that the retail markets are heavily long.
Typically, retail traders are wrong. So, if they’re heavily long, and they’re adding their positions around this point, their stop losses will typically be below these key lows. Institutions often drive prices below these low areas to either grab liquidity and move the price in the direction or seek those areas and push the price to the downside.
For me, it’s one to watch. We will check the retail sentiment on the Forex Market Outlook and see how that’s changed, but this could still be one to watch next week. If that US Dollar strength is going to follow through, we should see a breakout here.
USDNOK
One chart that I quite like the look of is the US Dollar versus the Norwegian Krone. The reason why I like this chart is that we’ve had this huge downwards move. That’s pretty much due to the oil prices getting stronger: oil gets stronger, the Norwegian Krone gets stronger, and the prices move nicely down here.
We’re now accumulating some position in here; this is the weekly timeframe, so usually, when you get this accumulation on the weekly, large institutions are getting involved with the market.
If the price breaks to the upside, I think we could see some longs. That would take oil prices to move lower. If the oil prices continue to move higher and head towards $70 to $75, then we could see a break out of this area;t his is a key area to watch.
I think this could be the one that I’ll feature in the Forex Market Outlook. We’ll do a little bit more research and talk about it next week.
But those are the key levels that have been hit this week.
I hope you had a great trading week, and I’ll speak to you soon.
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