The surprise last week was the New Zealand Dollar’s rally after the RBNZ (Reserve Bank of New Zealand) cut Interest Rates by 50 basis points. The strongest currency across the currency board was the Japanese Yen, not only technically but also fundamentally, especially after they reported in Japan a CPI (Consumer Price Index) of 2.6%, much higher than the forecast. Additionally, both the Euro and the Sterling rebounded, and they both outperformed the US Dollar despite a weak CPI report in Germany. That happens primarily due to Greenback’s overall weakness.
This week is expected to be a busy week in terms of news, and volatility is expected to be high.
On Monday, the markets will get active early in the morning, as Retail Sales will be reported in Australia during the Asian session. The forecast estimates an increase from 0.1% to 0.4%. This can boost the Aussie and perhaps maintain some bullish momentum against the US Dollar during the Asian session. The next significant event for the day will be the Retail Sales in Switzerland. The forecast also estimates an increase from 2.2% to 2.6%. If this increase is confirmed and the market follows through, we expect a temporary strength of the CHF and some short-sell opportunities on the USDCHF currency pair. Next will be the Final Manufacturing PMI in the UK, and the consensus estimates the same at 48.6. Only thirty minutes later, in the Eurozone, they will report the Unemployment Rate. The forecast shows an unchanged number, keeping it at 6.3%. Moving into the New York trading session, in the US, they will report the ISM Manufacturing PMI. The consensus estimates an increase from 46.5 to 47.7, which can be favourable for the US Dollar value. This event usually brings a lot of volatility around the US Dollar, and day trading requires close attention.
Despite the fact that Tuesday is a short week in terms of significant news events, the volatility is expected to be as usual starting early morning, as no significant news events will be reported during the Asian Trading Session. Volatility will pick up during the European and London trading sessions. First, Switzerland will report its CPI (Consumer Price Index). The forecast estimates an increase from 0.6% to 0.7%. This can help the Swissy gain further strength and cause more weakness to the USDCHF. The trading day will end RBNZ’s Governor Orr speech. This time, his speech will be important as we will gain more understanding of how the RBNZ sees New Zealand’s economy a week later after they drop their Interest Rates to 4.25%.
It is the middle of the trading week, and this Wednesday is expected to be a highly volatile day. Starting from the Asian trading session, Australia will report its GDP (Gross Domestic Product). The consensus estimates an increase from 0.2% to 0.5%. If the actuarial report confirms the forecast and the market follows through at the same time, we expect strength in the Australian Dollar. The next significant event will be the BoE (Bank of England) Governor’s Balley speech. This can temporarily increase volatility around the Sterling. Only an hour later, in the Eurozone, they will report the PPI (Producer Price Index). The forecast estimates an increase from -0.6% to 0.4%. It is not the type of event that generally causes significant trend changes in the market but usually attracts the market participants' attention. The trader’s focus will be on the ADP report during the New York trading session. This is an early indication of what the NFP report will be 48 hours later. The consensus this time estimates a weak ADP. Currently, the ADP is 233K, and this time, it is expected to drop to 166K. If this weakness is confirmed, the US Dollar is expected to lose value and depreciate at least temporarily.
Soon after the ADP reported, ECB President Lagarde gave a speech in the Eurozone. The next significant event for the day will be the ISM Services PMI in the US. The forecast shows a decrease from 56.0 to 55.5. This event usually causes intense volatility in the markets, and the major currency pairs (meaning those including the US Dollar) are expected to fluctuate noticeably on the price charts. A possible weakness in the US Dollar can force the USDJPY into further weakness, as the Japanese Yen is considered technically and fundamentally strong. The day will end with the Fed’s Chairman Powell speech. Most of the time, when Powell hosts a speech, the markets experience high volatility, and as his speech will be toward the end of the New York trading session, the liquidity will start to dry up. Therefore, day traders should manage their open positions carefully.
On Thursday, the first significant event will be the Unemployment Rate in Switzerland. The forecast estimates an increase from 2.6% to 2.75. If the outcome confirms the forecast, and at the same time, the market follows through, we expect a weak Swissy. Based on the technical analysis, the EURCHF and the GBPCHF both follow an intermediate sideways trend. Therefore, short-sell opportunities might be more promising for the CHFJPY if, by this time, the Japanese Yen’s strength continues. The next event will be the Construction PMI in the UK. The forecast estimates a drop from 54.3 to 53.5. A significant drop is also expected in the Retail Sales in the Eurozone from 0.5% to -0.4%, which they will report thirty minutes later. An event that will take place all day will be the OPEC Meetings, and usually, it affects the USOIL more. The day will end with the IVEY PMI in Canada. The forecast estimates an increase from 52.0 to 53.1. This is considered a significant increase, and this outcome can be favourable to the Canadian Dollar.
Moving into Friday, the markets will anticipate the NFP (Non-Farm Payroll) report in the US. During the Asian and London trading sessions, the market, and especially the major currency pairs, moves in a narrow price range and, in many cases, sideways. This is because the NFP outcome will set the tone for the US dollar, and the markets will reveal their directions. There won't be any significant news events during the Asian trading session. Moving into the London session, the Eurozone will report its GDP (Gross Domestic Product). The consensus estimates an unchanged 0.4%. The next event will be the NFP in the US. The consensus estimates a significant increase from 12K to 202K. At the same time, the Unemployment Rate in the US is expected to increase from 4.1% to 4.2%, and the Average Hourly Earnings are expected to drop from 0.4% to 0.3%. In case the reported outcomes beat the forecast, the price of the US Dollar can move significantly upwards on the price charts of all major currency pairs. The last event will be the Unemployment Rate in Canada. So far, the only available information is the currency 6.5%.
EUR USD 4H
Following the previous week’s Market Outlook, the price of the weekly chart ended as an Inside Bullish candle. This shows that the Sell Orders were much less compared to the buy orders in the last 5 trading days. On the 4-hour chart, the market opened last Monday with a GAP, which in the end was defined as an Exhaustion GAP as it was at the end of the downtrend. Last Wednesday, the price made a higher high and formation, marking the swing low at point (a) as a Failure Swing Low (FSL). On the same day, the price created a Bullish Engulfing Order Block of around 1.04800 and an FVP (Fair Value Price) of around 1.05000. Last Friday, the price created a Bullish Crossover once the 20-period crossed above the 50-period moving average. The RSI Oscillator is above its middle line of 50, and this is bullish. Therefore, if the price continues moving upwards, the first resistance area it will be around 1.06098, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be at 1.06546. On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be at 1.04250. If the price surpasses the S1 and keeps moving downwards, the next support area, S2, will be around 1.03319, which is the previous week’s low.
GBP USD 4H
The previous week’s price action ended with another Bullish candlestick closing above the previous week’s high level. On the 4-hour chart, the price was unable to continue the major downtrend, and last Wednesday, a Bullish Marubozu candle printed during the New York trading session created a new market structure of a higher high formation. The price then created a Bullish Engulfing Order Block around 1.25700 and an FVP (Fair Value Price) around 1.26200. Last Friday, the 20-period moving average crossed above the 50-period moving average, known as the Bullish Crossover, which has bullish implications. The RSI Oscillator is above its 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 continues moving upwards, the first resistance area, R1, will be at 1.27503, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be around 1.29260. Oppositely, if the price enters a retracement phase, meaning it will start moving downwards, the first support area, S1, will be at 1.26452. This is considered a key level of support as it consists of the 20 and 50-period moving averages, and it is very close to the FVP, as pointed out on the chart. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 1.25072, which is the previous week’s low.
AUD USD 4H
Last week, the AUDUSD price action on the weekly chart ended as a Bullish Hammer with a Long Lower Wick. The most significant part of the price action was that it Falsely Broke out the previous week’s inside candle, misleading all traders looking to sell the currency pair. On the 4-hour chart, the price closed below the Lower Band last Tuesday, creating the False Break Out, and then it bounced off and moved upwards, penetrating the middle line of the Bollinger Bands indicator, which is the 20-period moving average. Because of this price behaviour throughout the week, the price didn’t create any significant Order Block or an FVP (Fair Value Price). The RSI is above its middle line of 50, and this has bullish implications. Starting Monday, if the price moves upwards, the first resistance area, R1, will be around 0.65498, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance is an R2, will be at 0.65984, which is an older weekly level (remain the same as we pointed out on the previous week’s Market Outlook). On the other hand, if the price moves downwards, the first support area, S1, will be 0.64342, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be at 0.63484.
USD JPY 4H
For another week, the Japanese Yen was a strong currency across the currency board. The price of the USDJPY dropped by 5000 points (500 pips), and the weekly candlestick formed a Bearish Marubozu pattern, with its closing price being below the 40-period weekly moving average (not shown on this chart). On the 4-hour chart, the price kept making lower highs and lower low formations. Last Wednesday, the price created an FVP(Fair Value Price) of around 153.000. The price has since kept lowering, and a noticeable Bearish Marubozu candle strengthened the downward move. On Thursday, the price created a Bearish Order Block of around 152.000. The 20-period moving average is below the 50-period, and this has bearish implications. The RSI and the Stochastic Oscillator are both in an Oversold condition, indicating bearishness. Therefore, if the price keeps moving downwards, the first support area, S1, will be at 149.466, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 148.846. A further move to the downside will find the S3 support area, around 147.347.
Conversely, if the price bounces off and moves upwards, the first resistance area, R1, will be around 151.950, which is the previous week’s high. This is considered a key level of resistance as it coexists with the 4-h Bearish Order Block and the 20-period moving average. If the price penetrates the R1 and keeps moving upwards, the next resistance area, R2, will be an Inside Resistance around 152.988. This is also a key level of resistance as it coexists with the FVP and the 50-period moving average.
USD CHF 4H
Following the previous week’s Market Outlook, the weekly chart ended with a Bearish continuation candle. The “bullish run” ended last week on the USDCHF. At the market open last Monday, the price Gapped, and since then, it has been moving downwards, creating lower high and lower low formation. The 20-period crossed below the 50-period moving average last Thursday, and this is bearish. This is known as the Bearish Crossover. Last Wednesday, the price created a Bearish Engulfing Order Block around 0.88800, which hasn't been tested yet. The Breakaway GAP that was created last Monday hasn’t been mitigated. The RSI Oscillator is below its middle line of 50, and this is bearish. The MACD is below the zero line, and its Histogram declines, indicating bearishness. Starting Monday, if the price keeps moving downwards, the first support area, S1, will be around 0.87977, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 0.87518. Oppositely, if the price bounces off and moves upwards, the first resistance area, R1, will be around 0.88475. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be at 0.89204, which is the previous week’s high.
GBP JPY 4H
Despite the Stong Sterling, the Japanese Yen was the strongest currency for another week in a row. This also has to do with Japan’s currency being considered a Safe Heaven asset during global economic and political events. The weekly chart ended with a Bearish Continuation candle, closing below the 40-period moving average (not shown on the chart). On the 4-hour chart, the 20-period is below the 50-period moving average, and this is bearish. The price kept making lower high and lower low formations, but last Friday, the Bearish Marubozu candle didn't follow through, and the price kept trading around the penetrated swing at point (a,) as shown on the chart. The RSI is below 50, which has bearish implications. The Stochastic Oscillator is in an Oversold condition, indicating bearishness. If the price keeps moving downwards, the first support area, S1, will be at 190.157, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be at 187.434. In case the price bounces off and moves upwards, the first resistance area, R1, will be around 192.479. This is a key level of resistance as it consists of the Bearish Engulfing Order Block and the FVP (Fair Value Price) created last Friday, as well as the 20-period moving average. If the price penetrates R1 and keeps increasing, the next residence area, R2, will be around 194.632, which is the previous week’s high.
GOLD 4H
Following the previous week’s market analysis, the weekly candlestick ended as a Hanging Man pattern, which usually has bearish implications. On the 4-hour chart, the price of GOLD declined, and a Bearish Marubozu forced the price to test the Bullish Order Block we pointed out last week. Since then, the price moved in a narrow price range without any defined direction. We see the Upper and the Lower Band are pointed parallel to each other, meaning that the price moves sideways. The MACD is flat around the zero line, and the RSI is slightly above the middle line of 50. Currently, the price is above the 20-period moving average, which is also the middle of the Bollinger Band indicator. Starting Monday, if the price moves upwards, the first resistance area, R1, will be at $2721, which is the previous week’s high. This is considered a key level of resistance as it coexists with the Bearish Engulfing Order Block formed last Monday. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be around $2749.
On the contrary, if the price declines and moves downwards, the first support area, S1, will be around $2605, the previous week’s low. If the price surpasses S1 and keeps lowering, the next support area, S2, will be an older weekly level of around $2562. A further downward move will find the next support area, S3, at $2536.
USOIL 4H
Following the previous week’s Market Outlook, the price of USOIL on the weekly chart ended as a Bearish Inside Candlestick. This shows a market that is primarily “Indecisive” in terms of direction. Despite this, the primary trend remains a Downtrend. On the 4-hour chart, the price keeps making Lower Highs, meaning that the downtrend in this time frame remains valid. The 50-period is below the 200-period moving average, and this is bearish. The RSI Oscillator is below its middle line of 50, which is also bearish. Last Tuesday, the price rejected the FVP (Fair Value Price), and the 200-period moving average was around $70.00. Since then, it has remained below both moving averages. Therefore, if the price continues moving downwards, the first support area, S1, will be around $68.87, which is the previous week’s low. If the price surpasses the S1 and keeps lowering, the next support area, S2, will be around $66.58. As this is a Demand Zone, the price is expected to experience a significant amount of volatility. If the price penetrates the S2 and keeps lowering, the next support area, S3, will be at $65.24.
On the other hand, if the price bounces off and moves upwards, the first resistance area, R1, will be at $70.28. If the price penetrates R1 and keeps increasing, the next resistance area, R2, will be around $71.41, which is the previous week’s high.
BTC USD 4H
Following the previous week’s bullishness, the price on the weekly chart ended trading within the boundaries (high and low) of the previous week’s candlestick. The price action is forming a Hanging Man, which is considered a top reversal pattern when founded after a progressive uptrend. On the 4-hour chart, the price last Tuesday entered into the Bullish Order Block area we marked on the chart last week. It formed a Bullish candle with a long lower wick, and since then, it bounced off and moved upwards, creating last Wednesday a Bullish Engulfing Order Block of around $93000 and an FVP (Fair Value Price) of around $94000. The 20-period is above the 50-period moving average, and this is bullish. The RSI is bullish as it is above its middle line of 50. The MACD is also bullish as both the MACD Line (Blue) and the Signal Line (Orange) are above the zero line. If the price keeps moving upwards, the first resistance area, R1, will be at $98889, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be the ATH (All-Time High) at $99650. If the price moves downwards to start a retracement phase, the first support area, S1, will be at $94664. This is a key level of support as it consists of the FVP area and the 50% Fibonacci level. If the price surpasses the S1 and keeps lowering, the next support area, S2, will be at $90736, which is the previous week’s low.
E-mini SP 500 Futures, 4H
Last week, the price of the SP 500 kept increasing. The weekly chart ended with a Bullish candle, which created a new ATH (All-Time High) at $6060. On the 4-hour chart, the price was following the primary trend in a series of higher highs and higher lows. The RSI Oscillator is above 50, which indicates bullishness. The Stochastic Oscillator is in an overbought condition, which has bullish implications.
Regarding the moving averages analysis, the 20-period is above the 50-period, which is bullish. Hence, if the price continues moving upwards, the first resistance area, R1, will be the ATH at $6060. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be the $6076, which is the 161.8% Fibonacci Extension measuring from the swing at point (a) until the swing at point (b). On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be at $6000.25. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be at $597.25, which is the previous week’s low. A further downward move will find the next support area, S3, at $5940.75.
US 30, 4H
That was the second week in a row that the US30 kept rallying. The weekly chart ended with a Bullish Continuation candle. On the 4-hour chart, the price kept making higher highs and higher lows. The 20-period is above the 50-period moving average, following the primary Uptrend, and this has bullish implications. The RSI is above its middle line of 50, which is bullish. Last Friday, the price made a higher high formation. At the same time, the Stochastic Oscillator showed weakness in following through, indicating Negative Divergences as shown on the chart, meaning that there is a disagreement about whether the bullish momentum continued. This is an early indication that the price might enter a retracement phase.
If the price continues moving upwards, the first resistance area, R1, will be at $45097, which is the ATH (All-time High). If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be $45233, which is the 161.8% Fibonacci level measuring the swing from point (a) until point (b). If the price penetrates the R2 and keeps moving upwards, the next resistance area, R3, will be at $454357, which is the 200% Fibonacci Extension, again from the swing at point (a) until the swing at point (b). In case the price moves downwards to start a retracement phase, the first support area, S1, will be at $44453. This is a key level of support as it consists of the 1-h Bullish Order Block and the 50-period moving average. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be at $43727, which is an older weekly level.
GER 30 (DAX Futures), 4H
Following the previous week’s sideway move, as we explained in the previous week’s Market Outlook, the price of the GER 30 Future resumed the major Uptrend. The weekly chart ended as a Bullish Hammer candlestick, which usually has bullish implications. On the 4-hour chart, the price made a higher high and higher low formation. The 20-period is above the 50-period moving average, and this is bullish. The RSI is in an Overbought condition, and this has bullish implications. The Stochastic Oscillator is also in an Overbought condition, which is also bullish. Starting Monday, if the price keeps moving upward, the first resistance area, R1, will be at 19722, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be the ATH (All-time High) at 19802.
On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be at 19386, the previous week’s low. This is a key level of support as it coexists with the 4-h Bullish Engulfing Order Block and the 20-period moving average. In case the price penetrates S1 and keeps lowering, the next support area, S2, will be at 19190, the previous week’s low.
