FOREX MARKET WRAP: 28th August

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 go through the Forex Market Wrap. We’re going to see what’s happened this week in the markets.
It’s gone pretty much against what we thought it would do. We’re very much looking for that US Dollar reversal.
Well, we did keep it in mind that none of the major currency pairs has changed the trend, which is super important for us to see on the start of the week – we didn’t see that. The market just continued to be a US Dollar bearish, and we’ve seen some continuations of some trends.
So if I go to the daily timeframe on Euro, for instance, it was looking quite good on Friday. This was Friday’s close, and we were expecting maybe the follow-through to break through these lows,, where we could then look for short opportunities. This is what happens sometimes when you’re looking for those trend changes. A lot of people try to get involved, you know, really, really, really, really, early, and I’m guilty of that as well.
But the market, here, on a reversal perspective, and still very much in an uptrend, and we wanted to see the market breakthrough this low, here, in order to look for those continuations to the downside. You can see the market has broken to the upside.
Looking at GB Pound, again, GB Pound was on our list to look for a shorting opportunity. The reason being is, when you look at the trend, you could see the potential for the market to pull back into previous highs for the trend to continue. That’s what I was looking at here. There were some low range and candlesticks, the market was closing and back within these highs. That suggested to me that we could see some downside into this zone here, around that 128-127 area. Which was what I was looking for. Again, the market didn’t want to play ball with that either – it’s pushed to the upside, and the daily timeframe, still in that uptrend.
What I liked last night was the fact that the market had formed this bearish rejection of these highs. Again, being Friday, that could have seen that drop through today, retesting these lows. But, that hasn’t happened. We weren’t triggered into this, unfortunately. The market has continued to push to the upside, breaking into those highs.
So it’s going to be super interesting for GB Pound to see if the market can actually close above that high. And on Monday, it’s more likely that this trend to the upside is going to continue. Right now, we can delete this. There’s no need to have this lying around on our orders because the market has gone against what we thought it would do.
Aussie is the same, as well. Unfortunately for us, this meant that we got stopped out. But, this one was looking really good for that reversal. Again, these nice candlesticks are suggesting that the momentum was fading. We could see a little bit of downside through there, we had some divergence on our RSI where the market was forming higher highs. But through here, we have lower highs on our RSI.
It was suggested to me after seeing that bearish engulfing candle, that we could see a push back down into this key-supporting zone on the weekly and then look for the move up.
But unfortunately for us, it just turned around, and the market favoured that more risk-on environment along with the stock markets rallying as well and just push to the upside. That’s also breaking into new highs, which again, could continue to the upside in terms of the trend. If we get another close there on Monday, it could be very interesting to see that dollar weaken even further.
Moving on to Kiwi. Kiwi was actually one that wasn’t on the list this week. It was still bearish compared to the other majors. So let’s compare this to GB Pound. For instance, if I went to the weekly time-frame it looked like GB Pound was going to pull back into this high here, like we’ve said. There was some room to break to the downside, whereas Kiwi was already at that previous structure high. You can see how that weekly trend has continued from that point.
The daily now breaking all these highs through here, and to the upside and is moving higher. Now, we’ve seen that maybe Kiwi is going to continue to push a little bit.
We did have a commitment of trader signal here, saying that there was a short signal on Kiwi, which could still play out as the price moves to the upside. The commercials will continue to add short positions. We’ve got to be a little bit careful with this one, but the market came back down into that supporting zone where we expected it to get to, which is great, and then it’s pushed to the upside through there.
USD/JPY was the one that we looked at. CAD/JPY, unfortunately, didn’t trigger us in but zoomed right up into those targets. I was looking for the market to retest this high, here. It didn’t retest. Unfortunately, it ran up and hit those targets.
EUR/JPY, unfortunately, we got stopped out as well. The market did give us that nice move that we were looking for, but unfortunately, it triggered us in, dropped in, took us out, then rallied to the upside and hit those targets there too.
The market has been in a little bit of a whipsaw effect this week. We’ve obviously had some major moves as well. But it’s just super interesting to see that the US Dollar continues to sell off despite numerous technical setups for the potential for the US Dollar to start pushing the downside.
So, regroup, go again next week, see if that US Dollar is going to continue to weaken, and go from there.
I hope you enjoyed the trading content this week, nonetheless, and have a great weekend.
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