The most important event of the previous week was the NFP (Non-Farm Payroll), and the outcome favoured the USD as 227K more payrolls were added to the US economy, giving a boost to the USD. The weakest currency was identified as the Australian Dollar, and this was primarily due to weak GDP (Gross Domestic Product). That offered some high-probability trading opportunities on the AUDUSD short. Additionally, both the Euro and the Sterling showed strength last week. Regarding cryptocurrencies, Bitcoin rallied and surpassed $100.000, which brought a lot of optimism to the crypto community.
This week, volatility is expected to be extreme as there will be many significant news events, with the Interest Rates of major banks being on the scope.
On Monday, the first event will be the GDP (Gross Domestic Product) in Japan. The forecast estimates an unchanged number of 0.2%. Next will be the Trade Balance in Japan, and the consensus estimates a lower number this time. Their Trade Balance is -315.2B, and they expect it to improve to -297.7 B. If the Japanese Yen's strength continues, we expect to see strong selling opportunities against commodity currencies like the AUD and the Canadian Dollar. The reason is that both Australia and Canada will report interest rates this week. A few hours later, China will report its CPI (Consumer Price Index), and the forecast shows an increase from 0.3% to 0.4%. Despite the fact that we don't trade the Chinese Yuan, a positive CPI can add value to the currency.
The next event will be Switczerland’s Consumer Confidence Index, with the forecast showing a decrease from -33.74 to -38. Next will be the Eurozone Sentix Investor Conference Index. The consensus estimates a drop from -12.8 to -13.2.
Market participants will anticipate the RBA's (Reserve Bank of Australia) Interest Rate report on Tuesday early morning during the Asian Trading Session. It is surprising that the RBA still tries to keep its rates at 4.35%, in opposition to all the other countries that have recently started cutting their rates every month. If the RBA keeps their rates unchanged, this can have a positive impact on the Aussie, not because this is what usually happens, but mainly because the other major banks, both last month and this month, are preparing to cut their rates. On the other hand, it is unlikely that the RBA will increase their rates. Afterwards, the RBA Press Conference will take place. Next, Germany will report its CPI (Consumer Price Index), and the forecast shows an unchanged of 2.4%. Last, the OPEC Meetings will start. This will be the second and last meeting of this year.
On Wednesday, the only significant event during the Asian trading session will be the PPI (Producer Price Index) in Japan. The consensus estimate is unchanged PPI, remaining at 3.4%. The outcome of this type of event doesn’t create any significant price moves on the chart to cause trend reversals. The markets will anticipate the CPI (Consumer Price Index) in the US during the US trading session. The forecast shows an increase from 2.6% to 2.7%. If this happened and at the same time the markets followed through, we expected a significant strength on the US Dollar. This can pair well with the Canadian Dollar as the BoC (Bank of Canada) will report their Interest Rates one hour later. The consensus estimates a 50-basis point drop from 3.75% to 3.25%. Suppose this is confirmed, and simultaneously, the market will follow through. In that case, the Canadian Dollar is expected to be the weakest currency during the New York trading session, and traders might find buy opportunities in USDCAD, EURCAD, and GBPCAD. Next, the BoC Press Conference will take place.
Moving into Thursday’s events, the volatility is expected to pick up early morning during the Asian trading session, as in Australia, they will report the Unemployment Rate. The forecast shows an increase from 4.1% to 4.2%. If this happens, it is very likely to affect the Australian Dollar negatively. If the US Dollar’s strength continues, the AUDUSD short will be on the hot list of most traders looking for ideal trading set-ups. Moving into the London trading session, SNB (Switzerland National Bank) will be the next to report its new Interest Rates. The consensus shows a 25 Basis Points decrease, meaning that from 1% to cut them to 0.75%. If they cut their rates, a drop in the Swissy on the price charts is likely to occur. Next, the ECB (European Central Bank) will report their Interest Rates. In the Eurozone currently, the rates are 3.25%, and they are kept top cut by 25 basis points, meaning dropping them to 3%. If this happens and at the same time the market follows through, a weakness in the Euro will be expected. This can offer short-selling trading opportunities in the EURUSD. The volatility around the interest rate report events is always expected to be extreme; therefore, day traders need to manage their open positions carefully. Moving into the US trading Session, the US will report their PPI (Producer Price Index). The forecast estimates an increase from 0.2% to 0.3%, which can positively impact the Greenback. Taking into consideration the potential weakness of the Euro, even a small positivity in events favouring the US Dollar will be enough to add more weakness to the EURUSD (meaning making the US Dollar stronger against the Euro). The day will end with the ECB (European Central Bank) Press Conference.
Friday will be a short day in terms of major news events. Volatility is expected to be as usual during the Asian trading session, as there will be no significant news events. During the London trading session, the UK will report its GDP (Gross Domestic Product). The consensus estimates an increase from -0.1% to 0.1%. If this is confirmed and the markets follow through, we expect a strong Sterling afterwards. The last significant event for the day and the week will be the Eurozone’s Industrial Production. The forecast estimates an increase from -2.0% to -0.1%. This can have a positive impact on the Euro, but not in the sense that it can cause any significant trend change.
EUR USD 4H
Last week, the EURUSD price didn't move in any direction. The main reason was the positive fundaments for both currencies. However, the most important out of all was the positive NFP last Friday, which gave some boost to the US Dollar. Usually, the follow-through will be on Monday. Hence, the price action of the weekly chart was a Doji candle. On the 4-hour chart, last Wednesday, the price tested the FVP (Fair Value Price) and the Bullish Engulfing Order Block we pointed out on the previous week’s market Ourtlolok. It then bounced off, and then it created a new market structure with a higher high and a higher low. The price thought created a new Bullish Engulfing Order Block 1.05000. Last Thursday, the price created a Bullish Crossover once the 20-period crossed above the 50-period moving average. The RSI Oscillator is above 50, which is bullish. Currently, the price is resting around the 20-period moving average. Therefore, if it continues moving upwards, the first resistance area, R1, will be around 1.06300, 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.
Oppositely, if the price is rejected and moves downwards, it will enter into the Order Block area. If it doesn't find support and penetrates it, then the first support area, S1, will be at 1.04606, which is the previous week’s low. If the price surpasses the S1 and continues moving downwards, the next support area, S2, will be around 1.04250, which is an older week’s level.
GBP USD 4H
Last week, the price of the GBPUSD moved upwards, as expected, but it ended up as a Long-Legged Doji candle on the weekly chart. On the 4-hour chart, the 20-period kept being above the 50-period moving average, indicating an upward-moving price. Last Monday and Wednesday, the price tested the FVP (Fair Value Price) area we pointed out in the previous week’s Market Outlook, and from where it bounced off and moved upwards, creating a higher high and higher low formation. The RSI is above 50, indicating bullishness. The Stochastic Oscillator is in an Overbought condition, which indicates that the price is rising. Last Wednesday, the price created a Bullish Order Block around 1.26700. Starting Monday, if the price continues moving upwards, the first resistance area, R1, will be at 1.28116, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be at 1.29260.
On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be an Inside Support, at 1.26972. This is a key level of support as it consists of the 50-period moving average and the 61.8% Fibonacci Golden Ratio measuring the swing from point (a) until point (b). If the price, instead of bouncing off, gets rejected and moves downwards, the next support area, S2, will be around 1.26172, which is the previous week’s low. A further downward move will find the next support area, S3, around 1.25072.
AUD USD 4H
Among the weakest currencies last week was the Australian Dollar. The weekly chart’s candlestick ended as a Long Bearish Marubozu candlestick. On the 4-hour chart, the price continues, making lower highs and lower low formations. The 20-period now is below the 50-period moving average, and this has bearish implications. The RSI is below its middle line of 50, and this has bearish implications. Last Wednesday, the price created an FVP (Fair Value Price) around 0.64700, and last Friday, due to the NFP, the price created a Bearish Order Block around 0.64400. If the price continues to move downwards, the first support area, S1, will be around 0.63728, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 0.63484.
On the other hand, if the price enters a retracement phase, it will start moving upwards. In this case, the 61.8% Fibonacci Goldern Ratio at 0.64243 can act as a resistance level and force the price to decline. If the price penetrates it, the first resistance area, R1, will be around 0.64558. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be around 0.65048.
USD JPY 4H
Both the US Dollar and the Japanese Yen were strong currencies last week. In the end, the US Dollar gained more strength. The weekly candle ended as a Spinning Bottom. The significance of this candlestick comes from the fact that a long bearish marubozu candle preceded it, and this can have bullish implications. On the 4-hour chart, the price created last Tuesday Positive or Bullish divergences, and the price afterwards created a higher high formation as shown on the chart. This is the first warning of a trend reversal. As the price hasn’t created a confirmed higher low formation, there is no uptrend in place. The 20-period is below the 50-period moving average, and this is bearish. The RSI is flat around its middle line of 50. Therefore, if the price keeps moving downwards, the first support area, S1, will be at 148.644, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 147.347.
On the other hand, if the price bounces off and moves upwards, the first resistance area, R1, will be at 151.232, 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 151.954.
USD CHF 4H
Despite the negative CPI in Switzerland last week, the Swiss Frank is respected as one of the Save Heaven Assets, and Swissy's strength comes primarily from this. The weekly chart ended with a Long-Legged Doji candle. On the 4-hour chart, the price last Thursday created a new market structure with a lower low and a lower high formation. On the same day, the 20-period crossed below the 50-period moving average, known as the Bearish Crossover. The RSI Oscillator is below its middle line of 50, and this is bearish. The Stochastic Oscillator is in an Oversold condition, indicating bearishness. Starting Monday, if the price keeps moving downwards, the first support area, S1, will be around 0.87335, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 0.86150.
Oppositely, if the price bounces off and moves upwards, the first resistance area, R1, will be an Inside Resistance around 0.88267. This is a key level of resistance as it consists of the FVP (Fair Value Price) and the Bearish Engulfing Order Block, both created last Thursday, as well as the 50-period moving average. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be at 0.88898, which is the previous week’s high. A further upward move leads to the next resistance area, R3, around 0.89204.
GBP JPY 4H
After a 5-week decline in the price of the GBPJPY, the weekly chart ended with a Long-Legged Doji candle. This can cause a bullish move to the price this week. On the 4-hour chart, the price changed a market structure after the penetration of the swing at point (a) last Wednesday. Since then, the price has moved sideways, remaining above the middle line of the Bollinger Band indicator, which is the 20-period moving average as shown on the chart. If the price maintains the bullish sentiment, it is expected to move upwards, creating a new higher high. In this case, the first resistance area, R1, will be around 192.378, which is the previous week’s high. This level coexists with the Upper Band and can act as an additional resistance factor for the price. If the price penetrates the R1 and keeps increasing, the next residence area, R2, will be around 194.632, which is an older weekly level.
Conversely, if the price declines and moves downwards, the first support area, S1, will be at 188.088, the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 185.826.
GOLD 4H
Following the previous week’s Market Outlook, GOLD didn’t create any directional move. Despite the fact that it declined a bit, which is shown on the weekly chart as a small bearish candlestick, on the 4-hour chart, the price was trading in a narrow trading range without any definable direction. Using the Bollinger Bands, the price was trading within the Upper and the Lower Bands, except last Friday when the price closed below the Lower Band with a Bearish candle. Still, it ended as a False Breakout as the next candle immediately closed above the Lower band. Therefore, the price didn't manage to create a new trend. The RSI is below its middle line of 50, indicating bearishness. The price is currently below the 20-period moving average, which is the middle of the Bollinger Band.
Starting Monday, if the price moves upwards, the first resistance area, R1, will be at $2656, the previous week’s high. If the price penetrates R1 and keeps increasing, the next resistance area, R2, will be around $2688.
On the other hand, if the price declines and moves downwards, the first support area, S1, will be around $2612, 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 $2605. A further downward move will find the next support area, S3, at $2562.
USOIL 4H
Last week, the price of USOIL on the weekly chart ended as a Bearish Reversal candlestick with a long Upper Wick. This is a sign of the market that was lugging Bullishness. On the 4-hour chart, the FVP (Fair Value Price) we pointed out in the previous week’s Market Outlook caused the price decline last Tuesday. One day later, the price created an FVP (Fair Value Price) of around $69.00. 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. The Stochastic Oscillator is in an Oversold condition, indicating bearishness. Starting Monday, if the price continues moving downwards, the first support area, S1, will be around $66.95. If the price surpasses the S1 and keeps lowering, the next support area, S2, will be around $66.58.
If the price penetrates the S2 and keeps lowering, the next support area, S3, will be at $65.24.
Conversely, if the price bounces off and moves upwards, the first resistance area, R1, will be at $70.49, the previous week’s high. If the price penetrates R1 and keeps increasing, the next resistance area, R2, will be around $71.41, an older weekly high.
BTC USD 4H
Following the previous week’s Market Outlook, the Bitcoin price reached the $100.000 mark last Thursday. Afterwards, the price declined and moved downwards, testing the 61.8% Fibonacci retracement and the Bullish Engulfing Order Block, as we pointed out on the chart last week. Since then, it has continued its bullish upward move. A 4-h Bullish Engulfing Order Block was created last Friday for around $98.000. The RSI is above its middle line of 50, which indicates Bullishness. The price currently is above the 20-period moving average, which is the middle of the Bollinger Band indicator. 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 penetrates the R1 and keeps increasing, the next resistance area, R2, will be around $111.564. This number we find if we use the Golden Ratio 161.8% of the Fibonacci Extension tool if we measure from the swing at point (a) until the swing at point (b) as shown on the chart. On the other hand, If the price moves downwards, the first support area, S1, will be at $91800, which is the previous week’s low. If the price surpasses the S1 and keeps lowering, the next support area, S2, will be at $90811.
E-mini SP 500 Futures, 4H
Following the previous week's analysis, the weekly chart ended as a Bullish Continuation candle. The SP500 strength was evidenced during the New York trading session last Friday. On the 4-hour chart, the price moved upwards in a series of higher highs and higher lows. The 20-period is above the 50-period moving average, and this is bullish. As shown on the chart, the price touched only once the 20-period moving average, and this is an indication of how strong the uptrend is. The RSI Oscillator is above its middle line of 50, indicating bullishness. The MACD is above the zero line, and this is bullish. The MACD’s Histogram is below the zero line, indicating that the price is in a retracement phase. Starting Monday, if the price continues moving upwards, the first resistance area, R1, will be the ATH at $6111. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be the $6126, 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 $6076.00. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be at $6036.25, which is the previous week’s low. A further downward move will find the next support area, S3, at the round number of $6000.25.
US 30, 4H
Out of all the three major US Indices, the US30 was the weakest last week. The price on the weekly chart ended as a Bearing Inside candlestick. We must keep in mind that the primary trend is an uptrend, which has bullish implications overall. On the 4-hour chart, the Bullish Order Block and the FVP (Fair Value Price) we pointed out in the previous week’s Market Outlook are both still valid, as shown on the chart. The price in this timeframe moves sideways within the Upper and the Lower Bands of the Bollinger Band Indicator. Last Friday, the price created a Bearish Engulfing candlestick during the New York trading session after the positive NFP in the US. The RSI Oscillator is below its middle line of 50, indicating bearishness. Therefore, if the price continues to move downwards, the first support area, S1, will be around $44592, which is the previous week’s low. If the price surpasses the S1 and keeps moving downwards, the next support area, S2, will be around 44453, 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 at $44911. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be $45097, which is the ATH (All-time High).
GER 30 (DAX Futures), 4H
Following the previous week’s Bullish Hammer price action, the price of the weekly chart ended as a Long Bullish Marubozu candlestick, creating a new ATH (all-time high) price of 20459. On the 4-hour chart, the price kept making higher high and higher low formation. The 20-period remains above the 50-period moving average, and this is bullish. The RSI is still in an Overbought condition, and this has bullish implications. The Stochastic Oscillator is also in an Overbought condition, which is also bullish. It is worth mentioning that the uptrend is so strong that the price didn’t create a noticeable retracement.
Starting Monday, if the price keeps moving upward, the first resistance area, R1, will be the ATH at 20459. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, is expected to be above 20500. As the price didn't make any retracement now, we can not use the Fibonacci Extention tool to estimate the potential new ATH. On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be at 20226. If the price penetrates the S1 and keeps moving downwards, the next support arena, S2, will be at 19932. This is a key level of support as it coexists with the 4-h Bullish Engulfing Order Block and the 50-period moving average. In case the price penetrates S2 and keeps lowering, the next support area, S3, will be at 19600, which is the previous week’s low.
