Ticker tape by TradingView

After The BOE's latest announcement of their rate hike, pound (GBP) pairs went flying higher. Some of this has to do with the fact that England is one of the first to tighten their grip on monetary policy while most other countries like the US are only pointing towards rate hikes without actually doing it yet. With that said, here are some of the biggest setups on GBP pairs.

Inflation Control

The December 16 rate hike to .25 from .1% was the first step to keeping their 2% inflation target in sight without getting out of control. The current inflation level is sitting around 5% according to CNBC, which is still pretty high but not too out of control for the Sterling.

Additionally, Endgland is projected to be the fastest recoverer from the pandemic in the G7 countries, more so than the US and Canada.What we may start to see is a sentiment shift from USD and CAD to GBP.

Best Setups on GBP Pairs:

Setups on GBP
GBPAUD

Pound aussie showing significant strength on the daily timeframes price comes up to test a previous top around 1.89000s. Continued momentum looks probable as demand drives up the pair's price for a second test at resistance. A break above this level could push price higher to the 1.90000s.

Setups on GBP
GBPJPY

Pound yen still looks strong on the 1D after pulling back to a steeply rising trend line. Support lies below around the 156 and 155 levels should price move lower. However, if price closes with rejection form today's lows, we may see a continuation to the highs around 158.

Why will US markets be flat or worse?

On December 15th the Federal Reserve Board of Governors made a press release detailing their plans to reduce their open market operation purchases in 2022. The central bank also predicts several rate hikes in 2021, and continuing on into 2023. When you combine this with the current overvalued state of the market, there's good reason to believe that we will see a minor correction, or a mostly flat market.

1. Fed Tapers Asset Purchases.

Fed Open Market Operation purchases of bank bonds and other assets of buoyed up the stock market. SPY and Fed assets look like virtually the same line. Running a correlation on SPY and Fed purchases from 1/2/2021 yields an astounding correlation between the two of 0.8537, or 85.37%. We hardly EVER see this much influence by the fed

2. Interest Rates

Rates have an inverse relationship with the market. When rates go up, stocks go down. What we want to know is how much rates will increase and how many hikes there will be. The Fed has indicated that there will be three hikes in 2022.

3. Overvalued Stocks?

Three Alternative Markets to Consider:

  1. King Dollar: The dollar has had an excellent run, as most FOREX traders know. But for all the reasons I mentioned above, you can expect it to do better in the long run. Less FED asset purchases and rate hikes will increase the USD's value relative to other currencies and traders should expect further gains in the new year
  2. Gold and Gold Miners: Downward pressure on US Equities and the FED backing off of support may scare investors out of the traditional equities. Two options for the prospective traders is your standard XAU pairs and gold miners. If you are unable to trade stocks on US markets, I recommend looking for gold miners on exchanges that are available to you in your own country

3. Emerging Markets and Heavy Industry related currencies in South East Asia and Pacific Economies
AUD, NZD will benefit form the gains in emerging markets in South East Asia. This year alone, Vietnam a 34% increase in their largest stock index. Because these are the largest regional speculative currencies in the area, FOREX traders looking to benefit from the gains in emerging economies would do well to consider AUD and NZD pairs.

For questions and comments, you can reach the author at smstreb97@protonmail.com or through the A1Trading discord at @smstreb97

Hey everyone! Welcome to this week's forex forecast for the week ending December 17th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at AUDUSD, EURUSD, EURAUD & XAUUSD. This will be the final WFF of 2021 as I'm going abroad to spend time with family. Hope everyone has a Merry Christmas and a Happy New Year, and I will be back from mid-January to continue this series of articles.

AUD/USD

Price recently broke out of the ascending channel, making a touch of the 0.70 key horizontal level which dates back all the way to September 2018, and is now on its way to potentially making a touch of the ascending channel. Look out for whether we see price re-enter the channel, suggesting further bullish moves towards the channel's top OR if we see price reject the channel's bottom, suggesting further bearish moves towards 0.70 and potentially new recent lows.

EUR/USD

Price is forming a triangle pattern following the break of the descending channel. Watch out for a break of this pattern, if we see a break above, look out for the retest and rejection before potentially going long. If we see price break lower, look out for the retest and rejection before going short. A break above 1.14 opens up price to 1.16; a short-term key level.

EUR/AUD

After breaking out of the ascending triangle pretty early, price has made its full move but is now retesting the pattern's resistance at around 1.57 which is the same as the ascending triangle from May earlier this year. Watch out for a rejection of this level, where following successive price action confirmations would be a potentially good time to go long on this pair.

XAU/USD

Gold continues to consolidate for another week, still failing to break below 1765 suggesting its potentially waiting for a major catalyst to create a new trend in the market. Price will likely be slow during the Christmas and New Years period.

For any questions or comments, you can reach me at @TraderBart on Telegram or @TraderBart#2638 through the A1Trading discord.

Let's look at the news event's we've got lining up this week...

(AUD) RBA Rate Statement

The Reserve Bank of Australia is widely expected to keep interest rates on hold at 0.10% once again. Although there have been some notable improvements in the Australian economy's performance, policymakers are likely concerned about the Omicron variant that might prompt another downturn in growth. In their previous rate statement, the RBA has already hinted that their first rate hike most likely won't happen until 2024 due to weak price pressures and other uncertainties.

(CAD) BOC Rate Statement

The Bank of Canada is likely to keep rates on hold once again at 0.25%. The latest employment data has been stronger than expected in the past month, which might be enough for the BoC to shift to a slightly more optimistic stance. However, policymakers are also likely concerned about crude oil price swings and how the Omicron variant might affect growth and trade.

(USD) CPI

The Consumer Price Index (CPI) report measures the change in the average price basket of goods and services by consumers, which can be anything from food, transportation and medical care. Changes in the CPI are used to assess price changes associated with living in the country. It is one of the most used statistics to identify periods of inflation or deflation.

The USD is releasing its monthly inflation figures this week, and we're expected to see slightly slower price pressures as headline CPI is likely to dip from 0.9% to 0.7% while the core figure is probably going to fall from 0.6% to 0.5%. Weaker than expected results could undermine policy tightening expectations, especially with the Omicron variant forcing policymakers to wait and see before making any big decisions.

Hey everyone! Welcome to this week's forex forecast for the week ending December 10th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDCAD, EURAUD, GBPJPY & XAUUSD.

USD/CAD

Price is now consolidating at the resistance of the previous ascending triangle pattern at 1.283. Over the next week, lookout for a potential break of this level, this opens up price to levels such as 1.293 and 1.31. If price fails to break this level, it's likely it will continue acting as resistance and instead, we could see a bearish run back down towards 1.258.

EUR/AUD

Price is now just below a short-term key horizontal level 1.618 following the break of the ascending triangle and horizontal level 1.59. Over the next week, look out for a potential break above 1.618 which suggests a bullish run to follow, opening price up to 1.635 and potentially new higher highs.

GBP/JPY

Looking at G/J in the long-run, price is definitely failing to make a new trend and break yearly highs at around 156.0-158.0. Price is currently making its fourth recent touch of 149.0 and over the next couple of weeks, a break below this level suggests potential long-term bearishness towards 129.0. If price reverses and instead stays above, it's also potential we could still see new highs being made. This is a long-term view so would need to look over the chart for months.

XAU/USD

Gold is continuing to stay above the long-term level 1765 and no major moves were made over the past week. Price did reject 1800 which suggests we could be seeing potential bearish moves coming up. A break below 1765 opens up price to levels such as 1725 and 1675. If price continues to stay above 1765 over the next week, it's likely we could be seeing price coming up to retest previous levels such as 1800 and 1835.

Let's look at the news event's we've got lining up this week...

(USD) FOMC Member Speeches

Many Fed policymakers are scheduled to give testimonies throughout the week to hint at any possible upcoming monetary policy changes which could move the USD around. The Fed Chair Powell is set to speak in webinars in front of the Senate Banking Committee and the House Financial Services Committee. Other important members to look out for is Fed's Williams, Bowman and Clarida.

(CAD) GDP

A Gross Domestic Product (GDP) report is a measure of the size and health of a country's economy over a period of time. The figure sums up the country's performance in terms of trade, consumer activity, government spending and investment during a particular period.

Analysts are expecting to see no change in growth following last months 0.4% expansion. Weaker job growth and rising price levels likely kept consumer spending in check, even as businesses slowly resume normal operations.

(AUD) GDP

Australia is scheduled to print its Q3 GDP report midweek and analysts are expecting to see a softer pace of growth compared to the earlier 0.7% expansion. Australia did go into lockdown amongst its major cities in the past quarter, likely limiting business and consumer activity once again. A weaker than expected reading will likely mean more downside for the AUD while a stronger reading could encourage tightening expectations and boost the currency.

OPEC-JMMC Meeting

Every month, the Organisation of Petroleum Exporting Countries (OPEC) and the Joint Ministerial Monitoring Committee (JMMC) have a meeting to discuss the outlook of Oil and its performance. OPEC aims to control the price of oil by adjusting supply volumes. If its members want to increase the price of oil, they can revise their production quotas downwards to limit supply.

The cartel is under pressure to increase its production targets, given how major economies like the US and China are taking it upon themselves to release crude oil reserves into the global market. The OPEC is worried that this might spur a global glut, so they may refrain from boosting supply for now. However, since they did miss their output goal earlier, this could mean they may be inclined to make up for it.

(USD) NFP

The Non-Farm Payroll (NFP) or also known as Non-Farm Employment Change data, released by the Bureau of Labor Statistics, is a key economic indicator for the US economy which represents the number of jobs added to US citizens, excluding farm, government, private household and non-profit organisation employees.

NFP data always causes a commotion in FX as it is an important indicator for the Federal Reserve Bank. When unemployment is high, policymakers tend to have an expansionary (stimulatory, with low-interest rates) monetary policy with the goal to increase economic output and increase employment.

Following October's report of an increase of 531k, analysts are expecting to see another similar November report with an increase of 528k jobs. This is expected to bring the unemployment rate down from 4.6% to 4.5%.

A stronger than expected report will boost the USD currency however, a weaker than expected result could slash hopes of a Fed interest rate hike sometime in the middle of 2022. Leading indicators like the ADP Non-Farm Employment Change and the ISM Manufacturing PMI will likely also bring in extra volatility.

Hey everyone! Welcome to this week's forex forecast for the week ending December 3rd, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at EURUSD, GBPUSD, GBPNZD & EURAUD.

EUR/USD

Price has fallen below the key horizontal level 1.14 which was seen as clear resistance many times in the past, and it looks like price may be going to retest this same level to either confirm as clear resistance or potentially make its way above this level again. Look out for price action confirmations as to how price reacts to this level before potentially going short.

GBP/USD

Price has made the next touch of the channel's bottom in this descending channel, and we could potentially see the trend continue and price head towards the channel's top. Look out for how price reacts to the key horizontal 1.342 level, as a break above suggests this whereas if price fails to break above, it's like we could see further downside movement to continue.

GBP/NZD

I've been pointing out that price did hit the bullish OB a couple of weeks ago, and it looks like price is now approaching the first TP just above 1.96 as it's potentially going to go inside this bullish breaker block. If price enters this zone and we see rejections, it's likely price will continue consolidating whereas a clear break outside of this zone higher suggests further bullish moves to continue.

EUR/AUD

Price broke out of this ascending triangle pattern pretty early and has already gone to the short-term key horizontal level 1.59 where it was seen as clear support previously. If price begins to reject this level, it's likely we will see price head back inside the pattern, but a break above suggests further bullish moves to follow, potentially towards 1.62 the next resistance.

Hey everyone! Welcome to this week's forex forecast for the week ending November 26th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPUSD, GBPAUD, EURAUD & XAUUSD.

GBP/USD

Waiting for price to make the next lower low in this medium-term descending channel. Currently, price is struggling to successfully break lower below 1.342. However, we are seeing a short-term bearish flag pattern and price is at the bottom of this ascending channel, expecting a pattern completion and a break lower soon. Looking for targets around 1.33 to make the next lower low.

GBP/AUD

Price has made a successful bullish move following the touch of the bullish breaker block, and currently sitting below a short-term key horizontal level 1.858. If we see price break above this level, look for a retest followed by successive rejections for a continued bullish move. If we see price struggle to break higher, and instead reject this level and head lower, it's likely we could see further bearish moves, and potentially a move back below the breaker block marking this zone no longer valid.

EUR/AUD

Price has fallen underneath the resistance of the ascending triangle pattern back in May, and in the past two weeks, we have seen this same level continuing to act as resistance. Currently, price is once again making its way back to this level again. A break above this level suggests further bullish moves to follow, but further rejections could suggest a move back to new recent lows.

XAU/USD

Gold nearish the bottom of this recent ascending channel, so I'm expecting a bounce off this line and a potential move up higher. We have been seeing price break recent highs such as 1800 and 1835, we did reach as far as 1880 the LV I've been mentioning in the past weeks. Looking for price to continue this move higher.

11/19/2021

AUDNZD could be setting up for yet another short opportunity after a weak rise from the lows. The pair is up 0.21% on the day at the time of writing this

Our outlook

The Aussie buck still has no real strength behind it since the central bank never mentioned a rate hike any time soon. On the other hand, the kiwi looks strong due to the expectations of a hike up to 50 basis points in 2022. The pair looks weak overall as well due to the overwhelming pressure to the downside.

Trade Setups

AUDNZD

AN on the 1D chart is coming up to a possible retest on a falling trend line. Depending on how today and next week goes, we may see price come up to that falling trend line which investors are likely watching for additional short setups. However, if momentum is exceptionally weak, price may fall to the lows of 1.02825 for support.

Let's look at the news event's we've got lining up this week...

(AUD) Monetary Policy Meeting Minutes

During the previous rate decision, the RBA kept their interest rates on hold as expected. However, the RBA has removed its yield curve control target on the April 2024 government bond since it is "losing credibility". The transcript during this event should provide more insight on when policymakers think their first tightening move may happen.

(USD) Retail Sales

The USD Retail Sales Report is set for Tuesday which shows the total value of sales at a retail level. Consumer spending accounts for a majority of economic activity, and therefore when citizens spend, it is a sign that people have jobs, people are making money, and people are able to spend money for whatever it is they want.

A pickup in consumer spending is eyed for October, with the headline figure expected to rise from 0.7% to 1.2% and the core reading to also pick up from 0.8% to 1.0%. These increases were likely caused by the rebound in auto sales, on top of the improvement in the labour market situation.

(GBP) CPI

The Consumer Price Index (CPI) report measures the change in the average price basket of goods and services by consumers, which can be anything from food, transportation and medical care. Changes in the CPI are used to assess price changes associated with living in the country. It is one of the most used statistics to identify periods of inflation or deflation.

Another surge in UK inflation is eyed, with the headline figure expected to climb from 3.1% to 3.8%. This may be enough to spark BoE rate hike bets once again, as stagflation remains a persistent threat to the UK economy.

(CAD) CPI

The BoC is also releasing its inflation figures this week as well as related indicators of price pressures. The headline CPI report doesn't currently have a forecast, but later in the week keep an eye on this event. Stronger than expected results could fuel monetary policy tightening expectations from the BoC.

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram