Last week, 4 of the Major Economies reported the new Interest Rates for their countries. In Australia, the RBA (Reserve National Bank) decided to keep their rates unchanged, leaving them at 4.35%. In contrast, the BoC (Bank of Canada) dropped them to 3.25%, the SNB(Switzerland National Bank) dropped them to 0.5%, and the ECB (European Central Bank) cut their rates to 3.15%. The positive CPI (Consumer Price Index) in the US gave a boost to the US Dollar. Out of all currencies, the weakest was the Japanese Yen across the currency board.
This week, we expected the intense volatility to be continued and directional moves to occur in many markets.
The first significant event will be Retail Sales in China. The forecast shows an increase from 4.8% to 5%. This can strengthen the Chinese Yuan despite the fact that we don’t trade it daily. During the European and London trading sessions, ECB President Legarde will give twice a speech. Next, in France, they will report their Flash Manufacturing PMI (Purchase Manufacture Index), which, as per the forecast, they expected to increase from 43.1 to 43.2, and the Flash Service PMI, which they expected to remain at 46.9. In Germany, the Flash Manufacturing PMI (Purchase Manufacture Index) is also expected to increase from 43.0 to 43.1, and the Flash Service PMI to increase from 49.3 to 49.5. Next, the Eurozone will report the Manufacturing PMI (Purchase Manufacture Index), which is expected to increase slightly but remain below the benchmark of 50, around 45. The Service PMI is expected to remain stable at 49.5, and the Composite PMI is also forecasted to remain around 48. Thirty minutes later, the same events will be reported in the UK, with the Composite PMI holding around 54, the Manufacture PMI around 48.1, and the Service PMI around 51.0. Moving into the US trading session, they will report the Service PMI, which is expected to drop to 55.7 and the Manufacture PMI to drop to 49.4. This can be considered a bearish sign for Greenbuck. The trading day will end with the speech of BOC (Bank Of Canada) Governor Macklem.
On Tuesday, volatility is expected to rise during the London trading session as the UK will report the Claimant Count Change. The forecast estimates an increase from 26.7K to 28.2 K. This could be a weak sign for the Sterling as more people claim Government benefits. At the same time, the Unemployment Rate in the UK is expected to remain at 4.3%. Next, the Trade Balance in the Eurozone is expected to drop from 13.6B to 11.9 B, which could be a weak sign for Euro. The volatility is also expected to be at its highest levels during the US trading session. In Canada, they will report their CPI (Consumer Price Index). The forecast shows a decrease from 2% to 1.9%. This can depreciate the value of the Canadian Dollar, continuing the currency’s weakness that started last week due to the Interest Rates cut by BOC. The last significant event for the day will be Retail Sales in the US. The consensus estimates an increase from 0.4% to 0.5%. If this happens and at the same time the market follows through, we expected a strong US dollar during the New York trading session. This can pair well with the potential weakness of the Canadian Dollar and offer Buy opportunities in the USDCAD currency pair.
On Wednesday, volatility is expected to be noticeable during the European and London trading sessions. The first significant event will be the UK's CPI (Consumer Price Index). The forecast expects a significant increase of 0.3%. Currently, the CPI in the UK is 2.3% and is expected to increase to 2.6%. If this happens and the market follows through, we will see a rise in the Sterling value and potential Bullish opportunities on the GBPJPY and the GBPUSD currency pairs in the intraday charts. A few hours later, the ECB Chief Economist Lane will give a speech. Moving into the New York trading session, they will report their Annual New Housing in the US. The forecast shows an increase from 1.311M to 1.344 M. An increase is also forecasted in the US Total Building Permits. As per the consensus, currently, the Building Permits are 1.41M, and they are expected to increase to 1.423 M. Both of these can considered as a positive sign for the US Dollar. However, these events are not going to create any directional move to the US Dollar, as towards the end of the New York trading session, the FED will report their new Interest Rates. They will try to cut them by 25 Basis Points, meaning that the current 4.75% is expected to drop to 4.5%. Thirty minutes later, the FOMC Minutes Meeting will take place. If the FED cuts the rates and the market follows through, we expect weakness in the US Dollar and Bullish trends to develop across the major currency pairs.
The trading day will end with the third-quarter GDP (Gross Domestic Product) in New Zealand. The forecast shows that the current number will remain unchanged at -0.2%.
The volatility is expected to be extreme during the Asian trading session on Thursday, as Japan will report its Interest Rates. The forecast estimates an unchanged number, keeping rates below 0.25%. If the Japanese Yen’s weakness continues this week, we expect to see more strength in the GBPJPY and potentially the USDJPY. The last will depend on how the market reacts to the previous day's events regarding the US Dollar’s performance. The BOJ Press Conference will follow. The next significant event will be the Interest Rates report by the BOE (Bank Of England). The forecast estimates that this time, the BOE will keep their rates unchanged at 4.75%. Only 2 out of the 9 MPC( Monetary Policy Committee) Members voted for rates cut this time. If they keep their rates unchanged, this usually leads to the currency’s weakening, but the direction of the Sterling will be determined by how the market will react afterwards. If the rates remain unchanged and the market follows through, then a weak GBP is very likely. Next, it will be the Monetary Policy Report in the UK. The last event for the day will be the Final GDP (Gross Domestic Product) in the US. The forecast shows an unchanged of 2.8% this time.
Friday, the last trading day of the week, is expected to be a short day in terms of significant news events. First will be the Retail Sales in the UK. The forecast estimates a significant increase from -0.75 to 0.5%. If this happens and the market follows through simultaneously, a strong Sterling is expected to be seen on the price chart. That can offer intraday buy opportunities in the GBPUSD, GBPJPY, and GBPCAD, considering the weakness of the Loonie (short for the Canadian Dollar) continues. Moving into the New York trading session, in Canada, Retail Sales are expected to remain at 0.4%, which is not considered a bullish sign for the Canadian Dollar. The last event of the day and the week will be the Core PCE Price Index in the US, with the forecast estimated a drop from 0.3% to 0.2%.
EUR USD 4H
Following the previous week’s Market Outlook, the price of the EURUSD on the weekly chart ended as a Bearish Candle, leaving noticeable Upper and Lower wicks. The primary trend is a downtrend. However, the candlestick analysis indicates that the trend is weakening. On the 4-hour chart, the price kept moving downwards, creating a series of lower highs and lower lows. Last Wednesday, the 20-period moving average crossed below the 50-period, known as the Bearish Crossover, and this has bearish implications. The RSI Oscillator is below its middle line of 50, which is bearish. Currently, the price is hovering around the 61.8% Golden Ratio of Fibonacci, measuring the swing from point (a) to point (b) and the 20-period moving average around the 1.05025 level, as shown on the chart. Therefore, if the price declines and moves downwards, the first support area, S1, will be at 1.04532, which is the previous week’s low. If the price penetrates S1 and keeps moving downwards, the next support area, S2, will be at 1.04250, which is an older weekly level. If the price penetrates S2 and keeps moving downwards, the next support area, S3, will be around 1.03319.
On the other hand, if the price moves upwards, the first resistance area, R1, will be around 1.05310. If the price surpasses R1 and keeps moving upward, it will find the Bearish Engulfing Order Block and the FVP (Fair Value Price), both created last Wednesday around 1.05500. If the price does not get rejected and instead keeps increasing, the next resistance area, R2, will be at 1.05944, which is the previous week’s high. If the price penetrates R2 and keeps increasing, the next resistance area, R3, will be at 1.06286.
GBP USD 4H
Last week, Sterling's weakness, coupled with the US dollar’s strength, forced the GBPUSD currency pair to decline. The weekly candlestick ended as a Bearish Candle, rejecting the 10-period weekly moving average (not showing on the chart). Since the beginning of the previous week, the price has been moving sideways on the 4-hour chart. Last Thursday, during the Asian trading session, once the US PPI reported positive, the price of the GBPUSD declined.
Additionally, the negative GDP in the UK the next day kept the value of the currency pair lower. As per the moving averages analysis, a Bearish Crossover occurred last Friday when the 20-period crossed below the 50-period. The RSI Oscillator is below 50, indicating Bearishness. Starting Monday, if the price keeps moving downwards, the first support area, S1, will be around 1.26082, which is the previous week’s low. If the price surpasses S1 and keeps lowering, the next support area, S2, will be around 1.25072, which is an older weekly level.
On the other hand, if the price bounces off and moves upwards, the first resistance area, R1, will be an Inside Resistance around 1.27134. This is considered a key level of resistance as it consists of the FVP (Fair Value Price) created last Thursday and the 50-period moving average. In case the price penetrates R1 and keeps increasing, the next resistance area, R2, will be around 1.27990, which is the previous week’s high. This is also another key level of resistance, as slightly below it is the Bearish Engulfing Order Block that was created last Thursday and caused the breakout of the trading range. Therefore, it can act as an additional resistance to the price.
AUD USD 4H
Following the previous week's Market Outlook, the price of the AUDUSD currency pair moved lower, testing May’s and August’s lows. The price on the 4-hour chart kept making lower highs and lower lows formations. Last Monday and last Thursday, the price tested the 50-period moving average before declining. Last Thursday, the price tested the 61.8% Fibonacci retracement and the 50-period moving average. Afterwards, it printed a Long-Legged Doji candle, which provided traders with great selling-short opportunities. Currently, the 50-period is below the 20-period moving average, which is bearish. The RSI is below its middle line of 50, and this has bearish implications.
Additionally, the MACD is below the zero line, which indicates bearishness.
Starting Monday, if the price continues moving downwards, the first area of support, S1, will be at 0.63368, which is the previous week’s low. If the price penetrates the S1 and keeps moving downward, the next support area, S2, will be at 0.627005.
On the other hand, if the price bounces off and starts moving upwards, the first resistance area, R1, will be around 0.64295. At this price level, there is a Bearish Order Block, which can become additional resistance, as shown in the chart. If the price penetrates R1 and continues its upward move, the next area of resistance, R2, will be approximately 0.64716, which is the previous week's high.
USD JPY 4H
Following the previous week’s price action, the price of the USJPY currency pair increased by 4300 points (430 pips). The weekly chart ended with a Bullish Marubozu candlestick. On the 4-hour chart, the price created a Bullish Engulfing Order Block last Tuesday, and a few hours later, it created a Bullish Crossover once the 20-period crossed above the 50-period moving average. The RSI is above the middle line of 50, and this is bullish. The Stochastic Oscillator is in an Overbought condition, and this has bullish implications. Starting Monday, if the price keeps moving upward, the first resistance area, R1, will be at 154.802, which is the previous week’s high. If the price penetrates the R1 and keeps moving upwards, the next resistance area, R2, will be at 154.726, which is an older weekly level.
On the other hand, if the price starts a retracement phase, it will start moving downwards. In this case, the first support area, S1, will be around 151.802. This is a key level of support as it coexists with the 61.8% Golden Ratio of Fibonacci, measuring the swing from point (a) until point (b), and also is around the 50-period moving average. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be at 149.690, which is the previous week’s low. A further downward move will find the next support area, S3, around 148.644.
USD CHF 4H
Last Thursday, the price of the USDCHF increased drastically once the SNB cut their interest rates by 50 basis points instead of 25, as the forecast estimated. That set the Swissy on the spot and gave the advantage to the already strong US dollar to keep pushing the price higher. On the weekly chart, the price ended as a Bullish Continuation candle. On the 4-hour chart last Monday, the price created a Bullish Engulfing Order Block of around 0.87800. Last Thursday, the 20-period crossed above the 50-period moving average, known as the Bullish Crossover. Last Thursday, after the interest rates report by the SNB, the price created a Bullish Engulfing candlestick. Since then, the market has been making higher high formations. That upward impulsive move created an FVP (Fair Value Price) around 0.88500. The RSI Oscillator is above 50, indicating Bullishness. Starting Monday, if the price continues moving upward, the first resistance area, R1, will be at 0.89460, which is the previous week's high. If the price penetrates the R1 and keeps moving upward, the next resistance area, R2, will be at 0.89580. In a further move to the upside, we'll find the R3 resistance area at 0.90011, which is an older weekly level. Conversely, if the price is rejected and starts a retracement phase, it will start moving downwards. In this case, the first support area, S1, will be an Inside Support at 0.88542. This price level is a key level of support as it coexists with the FVP (Fair Value Price), the 50-period moving average, and the 61.8% Fibonacci retracement, known as the Golden ratio, as shown on the chart. If the price surpasses this level and keeps moving downward, the next area of support S2 will be at 0.87588, which is the previous week's low.
GBP JPY 4H
Following the previous week's market outlook, the Long-Legged Doji candle forced the price to move upwards. The weekly chart ended up as a Bullish Continuation candle, closing above the 10-period weekly moving average (not shown on the chart). On the 4-hour chart, last Tuesday, the 20-period crossed above the 50-period moving average, known as the Bullish Crossover. The price has since started moving upwards, creating higher highs and higher lows. Last Monday, the price created a Bullish Order Block around 190.800. This price behaviour leads the RSI Oscillator to be above the middle line of 50, indicating Bullishness.
Additionally, the MACD is also above zero, and this has bullish implications. Therefore, if the price continues to move upward, the first resistance area R1 will be at 195.004, which is the previous week's high. If the price penetrates the R1 and keeps moving upwards, the next resistance area, R2, will be at 197.790, which is an older weekly level. On the contrary, if the price declines, a retracement will occur. The price will start to move downwards, and then the first area of support S1 will be an Inside Support at 192.378. This is a key level of support as it consists of the 61.8% Golden ratio of Fibonacci and the 4-h FVP (Fair Value Price). In case the price penetrates the S1 and keeps lowering, the next area of support, S2, will be at 190.607, which is the previous week's low. A further downward move will find the S3 support at 188.088.
GOLD 4H
Overall, the price of GOLD last week didn't cause any significant changes in the market. The weekly chart ended as a candle with a small body and a Long Upper Wick which usually has bearish implications. As the major trend or primary trend is an uptrend, traders need to be aware that at any point, the primary uptrend can be resumed. On the 4-hour chart last Thursday, the price broke below the Upward Trendline T1, as shown on the chart. Last Friday, during the London trading session, a Bearish Marubozu created a lower low and lower high formation, which defines a downtrend. The 20-period remains above the 50-period moving average. Based on the moving averages analysis, this has bullish implications. The RSI, though, is below its middle line of 50, which is bearish. The Stochastic Oscillator is almost in an Oversold position, indicating the short-term bearishness of the Gold market. Last Thursday and last Friday, the price created two Bearish Engulfing Order Block areas around $2710 and $2690, respectively. An FVP(Fair Value Price) was created around $2700 last Thursday. Starting Monday, if the price continues to move downwards, the first support area S1 will be at $2627, which is the previous week's low. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be around $2613, which is an older weekly level.
On the other hand, if the price bounces off and moves upward, the first resistance area R1 will be around $2692. This is considered a key level of resistance as it coexists with the Bearish Engulfing Order Block and the 20-period moving average. If the price penetrates R1 and keeps moving upwards, the next resistance area, R2, will be around $2726, which is the previous week's high.
USOIL 4H
Following the previous week's market analysis, the bearish reversal candlestick we explained last week on the weekly chart followed through, and the price reversed and moved upwards, creating a Bullish Engulfing reversal candlestick pattern on the weekly time frame. On the 4-hour chart, the price moved upwards in a series of higher highs and higher lows, indicating an uptrend. Last Thursday, the price rejected the 20-period moving average, and it created a new higher high formation, leaving behind a Bullish Engulfing Order Block on the hourly time frame around $69.50. Last Wednesday, the 20-period moving average crossed above the 50-period moving average, known as a Bullish Crossover. The RSI is almost in an Overbought condition, showing bullish strength in the U.S. oil market. At the same time, the Stochastic Oscillator is above its upper boundary of 80, which indicates Overbought conditions. Starting Monday, if the price continues moving upward, the first resistance area, R1, will be at $71.35, which is the previous week's high. In case the price penetrates the R1 and keeps moving upwards, then the next resistance area, R2, will be around $72.85.
On the other hand, if the price declined and moves downward, it will start a retracement phase. In this case, the first support area, S1, will be around$ 69.85. This level is considered a key level of support because it coincides with the 61.8% Golden Ratio of Fibonacci and the 20-period moving average. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be around $69.11. As this level is around the 50-period moving average and the Bullish Engulfing Order Block, it can act as a strong supporting factor for the price. In case the price penetrates the S2 and keeps lowering, the next area of support, S3, will be at $66.95, which is the previous week's low.
BTC USD 4H
As per the previous market analysis, the price of Bitcoin on the weekly chart ended as a Doji candle with a tiny body, almost similar to the Gravestone Doji candlestick pattern. The price last week remained within the boundaries of the previous weekly candle high and low. Therefore, on the 4-hour chart, the price moved sideways or within a trading range. If we use the Bollinger Bands indicator, we see that the price last Monday created a Bullish Hammer around $95.000, breaking below the Lower Band as shown on the chart. But the next day, the price tested again at the same level, creating a Double-Bottom formation. It then bounced off and moved upwards, reaching the Upper Band of the indicator. The price created a Demand Zone of around $94,500 last Tuesday and an FVP (Fair Value Price) of around $99,000 last Wednesday. The RSI Oscillator is above 50, which indicates bullishness. The MACD is above the zero line, and this is bullish. Also, the MACD Histogram is positive, indicating bullishness. Currently, the price is above the 20-period moving average, which is the middle line of the Bollinger Band, and this has bullish implications. If the price keeps moving upward, the first resistance area, R1, will be at $104,015, which is the ATH (All-Time High). If the price surpasses the R1 resistance and continues to move upward, then the next area of resistance, R2, will be around $111.564, the new ATH , which is estimated using the 161.8% Fibonacci Extension, as shown on the chart. On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be an Inside Support of around $98,267. If the price penetrates the S1 and keeps moving downward, the next support area, S2, will be at $94,140, which is the previous week's low.
E-mini SP 500 Futures, 4H
Following the previous week's market analysis, the price of the S&P 500 remained below the ATH (All-Time High), which was at $6,1111. Last week, the price on the weekly chart ended as an inside Bearish candle. On the 4-hour chart, if we use the Bollinger Band indicator, we see that the price created a False Breakout of the Lower Band on Tuesday, and since then, it has been trading within the Lower and the Upper Band. Currently, the price is below the 20-period moving average, which is the middle line of the Bollinger Band indicator, and this has bearish implications. The RSI Oscillator is below its middle line of 50, and this is bearish. The MACD is below its zero line, and this has bearish implications.
Additionally, the MACD’s Histogram is declining as the MACD Line (Blue) crosses below the Signal Line (Orange), indicating bearishness in the short-term price move. Therefore, if the price moves downward, the first area of support, S1, will be at $6039.75, which is the previous week's low. If the price penetrates the S1 and keeps moving lower, the next support area, S2, will be at $6,000.25.
On the other hand, if the price moves upward, the first resistance area, R1, will be at $6102.50, which is the previous week's high. If the price penetrates the R1 and keeps its upward move, the next area of resistance, S2, will be the ATH (All-Time High) at $6111.
US 30, 4H
For the second week in a row, the US30 was the weakest of the three major U.S. indices. Following the previous week’s Market Analysis, the weekly chart ended as a Bearish Continuation candlestick. The primary trend remains an uptrend, but a strong downtrend develops on the lower timeframes. On the 4-hour chart, last Monday, during the New York trading session, the price created a Bearish Engulfing Order Block around $44,600. Also, last Thursday, the price created another Bearish Engulfing Order Block around $44,100. The price was trading below the 20-period moving average, showing that a strong downtrend was developing in the market. The 20-period remains below the 50-period moving average, and this is bearish. The RSI Oscillator is almost at its Oversold condition, which has bearish implications. The Stochastic Oscillator is below its lower boundary of 20, which means it is in an Oversold condition. Starting Monday, if the price continues moving downwards, the first support area, S1, is at $43,767, which is the previous week's low. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, is around $42,890, which is an older weekly level.
On the other hand, if the price finds support, bounces off, and moves upwards, the first resistance area, R1, will be at $44216. If the price penetrates R1 and keeps increasing, the next resistance area, R2, will be at $44,730, which is the previous week's high. This is a key level of resistance as it coexists with the Bearish Order Block, as shown on the chart.
GER 30 (DAX Futures), 4H
Last week, the price of the GER30 didn't make any further directional move. The weekly price action ended with a Doji candle, creating a new ATH(All-Time High) at 20545. Consequently, on the 4-hour chart, the price moved sideways. Using the Bollinger Band Indicator, we can see on the chart that the price was constantly trading from the Upper to the Lower Band without creating any significant violation of the bands. This simply means that the volatility was considered as “normal”. When there is a volatility expansion, we tend to see the price penetrate decisively the Bands and the prices close below and above the Lower and the Upper Bands, respectively. The RSI is above its middle line of 50, which is bullish. The MACD indicator is above the zero line, which also has bullish implications. Currently, the price is around the middle of the Bollinger Band, which is the 20-period moving average. As we can see from the chart, the Upper and Lower Bands are parallel to each other, which shows that the market is indecisive. Starting Monday, if the price keeps increasing, the ATH price at 20545 will be the first resistance R1. If the price penetrates the R1, closes above it and moves higher, the next resistance will be a new ATH. In order to predict that in advance, we will use the 161.8% Fibonacci Extension. Therefore, the next resistance price, R2, will be the 20640.
On the other hand, if the price declines and moves downwards, the first support area, S1, will be at 20287, the previous week’s low. If the price penetrates S1 and keeps moving downwards, the next support level, S2, will be 19932.
