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In this week’s Market Outlook we take a look at the key charts of the week with #EURUSD, #AUDUSD, #NZDUSD and more!
In this Week Ahead Analysis, we’ll be taking a look at the strength and weakness chart and go through some pairs of interest.
Strength and weakness chart
The pairs of interest I’ll be focusing on are US Dollar pairs because the USD continues to gain strength. I’m going to focus on major currencies because, despite the fact that the Australian Dollar gained strength and the Kiwi stayed the same, they’re still weak on the strength meter. Both currencies are still in the minus numbers, whereas the USD is continuously gaining strength.
What’s also interesting is the Swiss Franc. The Swiss Franc was at the highs of the strength meter, and it’s starting to go down, showing a potential reversal forming. This means that we could look for USD/CHF long opportunities next week.
This week’s strength and weakness chart highlights the USD continuously gaining strength and the CHF starting to lose strength.
EUR/USD
We previously spoke about EUR/USD in the Forex Market Wrap and the fact that the price could go up to the current weekly highs and reject. That’s exactly what happened on Friday.
Despite 1.2 being a key level to watch. We can also look for the change in trend because the price recently came back to the trend line lows. Since the price is squeezing in that area makes me think that we’re going to see a breakout next week.
At least, this is what I want to see if I were to short this market because obviously, we could still rally up, hit the 1.2 level, and continue down.
The EUR/USD price is beginning to consolidate near the major swing level of 1.2000. If the price rallies and rejects the major swing level, we can look for the downtrend to continue. Alternatively, we can look for the price to break and close below the minor trendline support for short opportunities.
Alternatively, we can watch the four-hour timeframe for a breakout to the downside and the overall market trend to continue.
USD/CHF
It’s going to be the same breakdown for USD/CHF. The price went into a key area where the market found support and resistance. We can look for a breakdown and a rejection of the price for a long opportunity.
The price is squeezing towards that area in the four-hour timeframe. We rejected the key level and we also kept rejecting the lows. So, we’re either going to see a breakdown and a continuation or a trend breakout.
The USD/CHF is one to watch this week due to the CHF losing strength on the strength meter, showing signs of a reversal. The daily trend on the USD/CHF is up. If the price breaks below the lows and forms a bullish close, we can then look for long opportunities.
That could also provide a long opportunity on USD/CHF if we extend that further and look for a continuation.
AUD/USD
The Aussie is showing slight low ranges in candlesticks. This is usually a sign of a trend continuation. The 0.76 level is a nice psychological level, as well as the structure area, where the market found strong support in the past.
The daily price action suggests that the market could move to the downside. But, we can look for reversal patterns in the four-hour timeframe. The current lows are sitting at 0.756. If the price double tops, we could look for a trend break and a continuation down.
AUD/USD is currently rejecting the psychological level of 0.7600. If the four-hour timeframe forms a reversal pattern, like a double top or a head and shoulders pattern, we can look for the trend to continue.
NZD/USD
The Kiwi is showing similar low ranges in the price action. The price went up to the 0.770 level, where we saw recent resistance. It is forming low ranges and candlesticks again, which is a good sign of the trend change. The price also found strong selling pressure.
If the change in trend continues while making lower lows and lower highs, we could look for a change from a retracement phase to an impulse phase, then look for short trade opportunities.
NZD/USD similarly rejected a minor resistance zone. If the four-hour timeframe forms lower lows and lower highs, we can assume that the daily downtrend will continue, then we can look for short opportunities.
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