For another week, the US Dollar was the primary dominant force in the markets. The stable CPI (Consumer Price Index) in the US and the increase in both the PPI (Producer Price Index) and the Retail Sales in the US caused the US Dollar to gain more value against the other currencies last week. The negative Unemployment and the drop in the GDP (Gross Domestic Product) in the UK caused the Sterling to be one of the most undervalued currencies last week. It is worth mentioning that the Japanese Yen showed significant strength last Friday, outperforming all the other currencies.
Monday is expected to be a trading day, with volatility being as usual during the Asian and London trading sessions. The day will start with the BoJ (Bank of Japan) Governor Ueda's speech, and it will continue with the ECB (European Central Bank) President Legarde's speech. Both speeches usually reveal how the two economies look like from their government scope and what their economic future looks like. Today will be also the first of the two days of the G20 meetings. We expect the volatility during the New York trading session to be noticeable, and some sudden intraday fluctuations are likely to be seen on the price charts.
On Tuesday, the volatility is expected to pick up quite early, as during the Asian Trading session in Australia, the RBA (Reserve Bank of Australia) will have their Monetary Policy Meetings Minutes. This will be an important meeting as the RBA keeps maintaining unchanged Interest Rates in Australia, and sooner or later, they will proceed with a rate cut. Moving to the London trading session, they will report their Trade Balance in Switzerland. The forecast shows a drop from 4.95B to 4.25 B. This can temporarily cause some weakness in Swissy. Next, the UK will have its Monetary Policy Reports Hearing, and the Sterling is expected to be directly influenced by the outcome of this event. Moving into the New York Trading Session, in Canada, they will report the CPI (Consumer Price Index). The forecast estimated a significant increase of 0.3%. Currently, the CPI in Canada is 1.6%, and it is expected to increase to 1.9%. If the actual report confirms the forecast, and at the same time, the market follows through, the Canadian Dollar is expected to be one of the strongest currencies during the New York trading session. The USDCAD is the currency in a primary Uptrend. An outcome as described can create a retracement on the currency pair. The last events for the day will be the Annual New Housing Starts in the US, which is expected to drop from 1.354M to 1.34M, and the US Total Building Permits, which is expected to rise from 1.425M to 1.435 M.
It's the middle of the trading week, and on Wednesday, the Japanese Yen will be on the scope since the early morning during the Asian trading session. In Japan, they will report the Trade Balance. The forecast estimates an increase from -0.19T to -0.15 T. This can cause some significant appreciation of the Japanese Yen if the actual report confirms the forecast. The next significant event will be the CPI (Consumer Price Index) in the UK. The consensus estimates an increase from 1.7% to 2.2%. If the actual report confirms the forecast and the market follows through simultaneously, Sterling is expected to gain value. We might see bullish trading opportunities on the GBPUSD and the GBPJPY. These, at first glance, will be considered retracement or counter-trend opportunities as both currency pairs are in major downtrends. Moving into the New York trading session, the only significant event will be the European Central Bank President Legarde's speech.
The Bank of Japan Governor Ueda's speech will be the first event on Thursday. This will be the second speech given by Japan’s Governor this week. The next event for the day will be the speech of the Reserve Bank of Australia Governor Bullock. Moving into the New York trading session, the volatility is expected to increase as the weekly Unemployment Claims will be reported. The consensus estimates an increase from 217K to 220K. We don't consider this an event that can affect the US Dollar’s primary trend, but it can cause some price retracement. We anticipate the volatility to increase around this event, and day traders need to be well prepared for that, protecting their open positions. The day will end with the Existing Home Sales report for the US. The forecast shows an increase from -1% to 1%. This is considered a significant increase for a monthly period.
Moving into the last trading day of the week, the volatility is expected to be noticeable during the Asian trading session, as in Japan they will report their CPI (Consumer Price Index). The forecast estimates a drop from 2.5% to 2.3%. If the actual report confirms the forecast and, at the same time, the market follows, though, the Japanese Yen is expected to become a weak currency across the board. This can allow the Greenback to take advantage of the situation and the USDJPY to be on a bullish run. The next important event for the day will be the Retail Sales in the UK. The forecast estimates a drop from 0.3% to -0.3%. If this is confirmed, it can cause Sterling a significant weakness, at least around the event report.
Next, in Germany, the Flash Manufacturing PMI is expected to increase from 43 to 43.1, whereas the Flash Services PMI is expected to increase from 51.6 to 51.8. In the Eurozone, the Flash Manufacture PMI is expected to remain the same at 46.0, and the Flash Services PMI is expected to increase from 51.6 to 51.8. Next, in the UK, they will report the Flash Manufacture PMI, which is expected to increase from 49.9 to 50.1, and similarly, the Flash Services PMI, from 52.0 to 52.3. Next will be the speech given by SNB (Switzerland National Bank) Chairman Schlegel. Moving into the New York trading session, in Canada, they will report their Retail Sales. The forecast estimates a decrease from 0.4% to 0.3%. In case of a negative report, the Canadian Dollar is expected to weaken, and the USDCAD can continue the primary uptrend. The last significant event for the day and the week, which usually causes a lot of volatility in the US Dollar, will be the Flash Manufacturing and the Services PMI in the US. The Manufacture PMI is expected to increase from 48.5 to 48.8, and the Services PMI will increase from 55.0 to 55.3.
EUR USD 4H
Last week, the price of the EURUSD experienced a significant drop of approximately 2300 points (230 pips). Therefore. The weekly candle ended as a Long Bearish Marubozu candlestick. On the 4-hour chart, the price on Monday created a Bearish Order Block around 1.07100 and an FVP (Fair Value Price) around 1.07000, as the price was creating lower low formations. Last Wednesday, a Bearish Marubozu candlestick continued the downtrend and left a new Bearish Order Block around 1.06500.
Consequently, the 20-period keeps being below the 50-period moving average, and this has bearish implications. The RSI Is below its middle line of 50, and this is bearish. The MACD created a Bullish Crossover as the MACD Line (Blue) crossed above the Signal Line (Orange), as shown on the chart. This can cause the currency pair to start a retracement phase. Starting Monday, if the price continues moving downwards, the first support area, S1, will be around 1.04963, which is the previous week’s low. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be at 1.04485, which is an older weekly level.
On the other hand, if the price moves upwards, the first resistance area, R1, will be around 1.06546. This is a key level of resistance as it consists of the 61.8% Golden Ratio of the Fibonacci level measuring from the swing at point (a) until the swing at point (b), the Bearish Order Block and the 50-period moving average. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be around 1.07280, which is the previous week’s high.
GBP USD 4H
Following the previous week’s Market Outlook, the sideways move ended as a downward breakout. The weekly chart’s price action ended as a Bearish Continuation candlestick. On the 4-hour chart, the price created a series of lower highs and lower lows. Last Tuesday, during the New York trading session, the price created an FVP (Fair Value Price) around 1.28000. The price then consolidated for a while, and the next day, it continued with a new lower low formation, creating a Bearish Order Block around 1.27500. As per the moving average analysis, the 20-period is below the 50-period, and this is bearish. Both the RSI and the Stochastic Oscillators are in their Oversold condition, and this also has bearish implications. Therefore, if the price continues to move downwards, the first support area, S1, will be around 1.25973, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be around 1.25094.
On the other hand, if the price bounces off and moves upwards, the first resistance area, R1, will be at 1.27700. This is considered a key level of resistance as it consists of the area around the Order Block, the FVP, and the 50-period moving average. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be an Inside resistance of approximately 1.28340.
AUD USD 4H
Following the previous week’s Market Outlook, the price of the Australian Dollar continued to decline, and the weekly chart showed this with a Bearish Marubozu candlestick. The weekly moving averages created a Bearish Crossover, which has bearish implications. On the 4-hour chart, the price created lower highs and lower low formation, as expected. While the price was declining and moving downwards, it created a 4-h Bearish Engulfing Order Block around 0.65700. A day later, during the New York trading session, a Bearish Marubozu candle sent the price lower, and it left an FVP (Fair Value Price) of around 0.65000. The 20-period crossed below the 50-period moving average, and this is bearish. The RSI is almost in its oversold condition.
Similarly, the Stochastic Oscillator is almost at its Oversold condition, which has bearish implications. Starting Monday, if the price keeps moving downwards, the first support area, S1, will be around 0.64408, which is the previous week’s low. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be at 0.63484, 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 0.65151. This is considered a significant area because it coexists with the 4-h FVP and the 20-period moving average. If the price penetrates the R1 and keeps moving upwards, the next resistance, R2, will be at 0.65984, which is the previous week’s high.
USD JPY 4H
Despite the US Dollar’s strength last week, the Japanese Yen was the next strongest currency. Therefore, the price on the weekly chart ended as a Bullish candle but with a noticeable Upper Wick, which can cause some downside this week. On the 4-hour chart, the 20-period is above the 50-period moving average, and this is bullish. The price was making higher highs and higher lows until last Friday. Last Tuesday, the price created a Bullish Order Block of around 154.000. Lastly, on Friday, as the price declined, an FVP (Fair Value Price) was created around 156.000, which hasn’t been tested yet. The Stochastic Oscillator is in an Oversold condition, and this is bearish. Last Friday, the price entered into the Order Block area, and it also closed below the 50-period moving average, as shown on the chart.
Starting Monday, if the price continues to move downwards, the first support area, S1, will be 153.408. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be the 152.142, which is the previous week’s low.
Conversely, if the price moves upwards, the first resistance area, R1, will be 156.751, the previous week’s high. A further upward move will find the next resistance area, R2, which is 157.614.
USD CHF 4H
The previous week’s Bullish Engulfing weekly price action played out well and sent the price of the USDCHF currency pair higher in value, creating a Bullish Continuation Candlestick pattern on the weekly chart. On the 4-hour chart, the price continued, making higher highs and higher lows. Last Wednesday, after the CPI report in the US, the price created a Bullish Order Block around 0.88000, and at the same time, an FVP (Fair Value Price) around 0.88400. The 20-period is above the 50-period moving average, and this is bullish. The RSI Oscillator is above the middle line of 50, and this has bullish implications. Starting Monday, if the price keeps moving upwards, the first resistance area, R1, will be at 0.89180, which is the previous week’s high. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be around 0.89802.
On the other hand, if the price is rejected and moves downwards, the first support area, S1, will be an Inside support, around 0.88419. This is considered a key level of support as it consists of the 61.8% Golden Ratio Fibonacci, the FVP and the 20-period moving average. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be at 0.87978. A further downward move will find the next support area, S3, at 0.87518, which is the previous week’s low.
GBP JPY 4H
The weekly price action ended as a Bearish Continuation candle, as expected based on last week’s market analysis. On the 4-hour chart, the price was consolidating between the Upper and the Lower Band of the Bollinger Band Indicator, as we pointed out in the previous week’s Market Outlook. On Friday, a downwards Valid Break Out created a lower low price formation. Last Friday, the price created a Bearish Order Block of around 198.000 and, at the same time, an FVP (Fair Value Price) of around 197.500. As the 20-period is below the 50-period moving average, it shows a market with bearish implications. The Stochastic Oscillator is well below its bottom line of 20, which means the market is Oversold. Starting Monday, if the price continues moving downwards, the first support area, S1, will be 194.296, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be 192.888.
On the other hand, if the price starts a retracement phase, it means it will move upwards. In this case, the first resistance area, R1, will be 196.748, which is an Inside resistance. This is considered a significant resistance area as it coexists with the 61.8% Fibonacci level measuring from the swing at point (a) until the swing at point (b), as shown on the chart. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be 198.426, which is the previous week’s high.
GOLD 4H
The price of GOLD declined for another week in raw. The weekly primary trend is an uptrend. However, on lower time frames, like the one in the 4-hour chart, the price created a strong downtrend with a series of lower highs and lower lows. On Monday and Wednesday, the price created two Bearish Engulfing Order Blocks around $2670 and $2610, respectively. Additionally, the strong sell-off of the price on Wednesday, during the New York trading session, created an FVP (Fair Value Price) of around $2600. The 20-period is below the 50-period moving average, and this is bearish. The RSI Oscillator is below its middle line of 50, which also has bearish implications. Currently, the price is below the 20-period moving average. If the price continues to move downwards, the first support area, S1, will be at $2536, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be at $2485. Oppositely, if the price moves upwards, the first resistance area, R1, will be at $2623. This is considered a significant level of resistance because it consists of the 4-h Bearish Engulfing Order Block formed last Wednesday around $2600 and the 50-period moving average. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be approximately $2686, which is the previous week’s high.
USOIL 4H
The way the weekly price action moved last week on the USOIL market could be described as a “textbook” example. The primary trend is a downtrend, and the reversal price action led to a downtrend continuation with a Bearish Marubozu candle. On the 4-hour chart, the 20-period crossed below the 50-period known as a Bearish Crossover. The RSI is below its middle line of 50, and this is bearish. Similarly, the MACD is below the zero line, which has bearish implications. Currently, the price has rejected the 20-period moving average, creating a lower high and lower low formation. Therefore, if the price continues moving downwards, the first support area, S1, will be around $66.80, which is the previous week’s low. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be approximately $65.24. In case the price bounces off and moves upwards, the first resistance area, R1, will be around $69.36. If the price penetrates the R1 and keeps moving upward, there is an FVP (Fair Value Price) that was created last Monday at around $69.60, and it can act as a resistance area. If the price surpasses the FVP and keeps increasing, the next resistance area, R2, will be approximately $70.54, which is the previous week’s high.
BTC USD 4H
Last week, the BTCUSD experienced a significant upward move of $13500 as investors around the world strengthened their hopes and beliefs about this cryptocurrency serving as a part of the US reserve assets arsenal. By the time we contacted this report, the price of the Bitcoin registered a new ATH (All-Time High) at $93435. The weekly candle is a Long Bullish Marubozu candle. On the 4-hour chart, the 20-period is above the 50-period moving average, and this is bullish. The RSI Oscillator is above 50, which has bullish implications. Starting Monday, if the price keeps moving upwards, the first resistance area, R1, will be $93435, which is the ATH. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, is expected to be $100.000, which is the 200% Fibonacci Extension.
On the other hand, if the price is rejected and starts a retracement phase, it will start moving downwards, and the first support area, S1, will be around $85136. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be at $81600. This is considered a key level of support as this consists of a Bullish Engulfing Order Block, an FVP (Fair Value Price) and the 61.8% Fibonacci Golden Ratio.
E-mini SP 500 Futures, 4H
The price on the weekly chart lost its upward momentum, and the price action ended as a Bearish Inside candle. A closer look at the 4-hour chart shows that the price made a new ATH (All-time High), but that was only a false upward breakout of around $6050. Since then, meaning from last Tuesday, the price has been losing momentum, and the Bearish candles became more obvious on the price chart. The price started making lower highs, and last Thursday, the selling pressure was evident, and the price was declining for two consecutive days in all major trading sessions in Asia, London and New York. That caused the RSI to drop below its lower line of 30, and then it became Oversold, which has bearish implications. Hence, if the price keeps moving downwards, the first support area, S1, will be at $5876.75, which is the previous week’s low. If the price penetrates the S1 and keeps lowering, the next support area, S2, will be an Inside support at $5803.75. If the price penetrates the S2 and keeps moving downwards, the next support area, S3, will be $5724.25.
On the other hand, if the price moves upwards, the first resistance area, R1, will be $6024.50. A Bearish Engulfing Order Block was created last week at this level, and it hasn’t been tested yet. If the price penetrates the R1 and keeps moving upwards, the next resistance area, R2, will be $6036.
US 30, 4H
Following the previous week’s Market Outlook, the price of the US30 moved upwards, testing the 300% Fibonacci Extension around $44524, which created a new ATH (All-Time High). Since then, it has started moving downwards with large Bearish candles, as shown on the chart. Last Friday, the price penetrated the swing low at point (a), which was the origin of the last upward move, meaning that the uptrend is no longer valid. By the end of the New York trading session, the price closed below the 50-period moving average, and this has bearish implications. This also caused the Stochastic Oscillator to become Oversold, indicating the aggressive selling pressure of the US30 market by the selling orders. If the price continues moving downwards, the first support area, S1, will be at $43376, which is the previous week’s low. If the price penetrates the S1 and keeps moving downwards, the next support area, S2, will be an Inside support at $42370, which was created a few weeks ago. Oppositely, if the price bounces off and moves upward, the first resistance area, R1, will be at $44155. This is considered a significant resistance area as it coexists with the 4-h Bearish Engulfing Order Block created last Thursday, which caused the price to break and change the trend direction, as shown on the chart. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be the ATH (All-Time High) at $44524.
GER 30 (DAX Futures), 4H
The sideways move started a few weeks ago and continued last week, forcing the weekly candle to end as a Long-Legged Doji candle and rejecting the 10-period weekly moving average (not shown on the chart). On the 4-hour chart, the price created a False Downwards Breakout last Wednesday. The next day, a Bullish Engulfing candlestick pattern created a Bullish Engulfing Order Block around 19.000. Since then, the price has moved upwards, and last Friday, the price closed above the 20-period moving average, which is the middle of the Bollinger bands. The RSI is above its middle line of 50, and this has bullish implications. Therefore, if the price moves upwards, the first resistance area, R1, will be at 19.371. If the price penetrates the R1 and keeps increasing, the next resistance area, R2, will be 19.621, which is the previous week’s high. This price level coexists with the Upper Band of the Bollinger Band Indicator. If the price is rejected and moves downwards, the first support area, S1, will be 18.903, which is the previous week’s low. A further downward move will find the next support area, S2, at 18.606.
