Hey everyone! Welcome to this week's forex forecast for the week ending September 10th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, EURUSD, GBPJPY & XAUUSD.
Price has been consolidating between 109-111 over the past couple of months, and we recently saw price bounce off the range's support back to the middle of the consolidation zone. Look out for a clear break above or below this structure to catch the new trend, following subsequent retests and rejections.
Huge moves rejecting the channel's top last week on E/U as price breaks below 1.18 and is now nearing the major key horizontal level 1.17. This level has been seen as major support over the past year or so, so look out for how price reacts to this level once we see price clearly enter. It's likely we could see the trend continue and price reaches the channel's bottom, before potentially retracing and making a move back towards 1.18.
Looking at the long-term trend on G/J price has recently touched and rejected off the previous high in this range at 156.0 and is now potentially making its move towards the downside. Currently, we have an ascending channel where price is actually at the bottom, and we're now waiting on clear confirmations whether price will break or respect this channel. If we see price break outside the channel, we'll likely see price continue the long-term trend and head towards the downside.
Price is once again back at the bullish order block at 1740, where financial institutions will push price towards before a reversal to take out traders who went long early, most likely at 1765. If we see price break below this zone, this area will become a breaker block, an area to go short off following subsequent retests and rejections.
Hey everyone! Welcome to this week's forex forecast for the week ending September 3rd, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at NZDCHF, GBPJPY, GBPNZD & XAUUSD.
Price is now sitting at the descending channel's top and traders are likely waiting on confirmation of either a rejection for a reversal towards the bottom, or price to break out, retest and continue heading higher. There is mixed retail sentiment at the moment, with 57% traders short currently, it's likely we could see price head higher to stop out traders early.
Price is currently consolidating near the channel's bottom and traders are now waiting on confirmations where price could be heading next. A close below the bottom could signify price possibly heading lower, and if price continues to stay inside the channel it's likely we could see price head towards the top in the long run.
Price is looking like it's going to exit the bullish breaker block and possibly head back down towards the key horizontal level around 1.92. If price does make a clear close outside the block, then this could likely happen. If price continues to stay inside, we could potentially see price make the next high again, and going long from this zone wouldn't be a bad idea.
Price is currently back inside the same zone we saw consolidation back in July between 1800 and 1835. A clear break above this level would suggest price is heading higher and if price does close below 1800, we could see price head back inside the channel again.
Hey everyone! Welcome to this week's forex forecast for the week ending August 13th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at GBPUSD, USDJPY, NZDCHF & XAUUSD.
Price is currently consolidating around this 1.387 zone which was seen as resistance in mid-July and now as new support in early August. If price continues to hold, we'll likely see price head towards the trendline once more before we eventually see a break. However, a break below this zone suggests continued downside movement, and an entry following a retest with continued bearish confirmations would be ideal. Remember, we did recently see a break of the long-term ascending channel, and hence we could be forming a new long-term descending channel.
Following the better-than-expected NFP news on Friday, we're seeing price potentially break out of this medium-term descending channel which was recently formed following the break of the long-term ascending channel. If price continues to stay above the channel's top, look out for a clear break, retest then enter with clear price action confirmations of a continued bullish move.
Similarly to U/J, price is at the top of this descending channel in the long-term bullish flag pattern. If price rejects this level and reverses towards the downside, a move to previous lows at 0.63 is expected, potentially 0.62 if we see further bearish confirmations. However, if we see price break out of this channel, we could likely begin to see price complete the flag pattern and head to new highs. An entry following a retest with continued bullish confirmations would be ideal at the channel's top.
Following Friday's NFP event, where we saw a huge improvement in US jobs, price did in fact fall 2.2%. Price has again gone underneath the long-term channel's top and is hovering around a key horizontal level at 1765. If price uses this level as support, we could see price reach lows at the bullish order block at around 1740; however, if price breaks this zone, we could see it tumble towards the psychological 1700 level. We could likely see further downwards pressure as Fed tapering bets grow following this strong NFP report.
Check out my previous USDJPY deep dive here to see how we have progressed...
We saw price travelling in an ascending channel since the start of the year, however at the start of July we did see price failing to create the next high in the channel, and instead starting forming new lower highs and lower lows. We're now seeing price move in this new descending channel, head back to test previous highs.
109.2 is a good horizontal level to watch out for, and how price reacts around this level. A clear break below this level indicated price to continue heading lower to make the next touch of the channel. If price is failing to break through this level then we may see more touches of the channel's top, and potentially a new trend.
Looking at retail sentiment, we got quite a mixed retail sentiment, there isn't a clear sided winner as to how most traders are currently trading U/J.
Over the next week, we've got a few news events coming out, an important one being NFP, where the US will be printing their latest employment numbers, likely to show a slight increase at 870k vs 850k. The unemployment rate is projected to also dip from 5.9% to 5.7%. Keep in mind that the Fed is keeping a close eye on the labour market, waiting for more evidence of a strong jobs recovery before adjusting policy.
Wednesday's headline ISM and business activity index both blitzed expectations, while new orders, employment, and prices paid all gathered pace from the prior month to mark further if not yet the 'substantial' progress towards policy targets needed to start tapering. However, Clarida expects conditions for hikes to be met by the end of 2022, assuming inflation and jobs develop in line with his projections.
Some short-term considerations for the Dollar could cause some challenges for the mid-term downside bias. Right now, economists are expecting the US to average between 5.0% & 7.0% annualized GDP in 2021, which would be the most substantial rebound since 1984. At the same time, growth forecasts for the EU and China have been lowered, which means the relative growth differentials should be more supportive of the USD.
The additional boost in savings and additional fiscal support means the odds of upside surprises in US growth and inflation have grown. Thus, even though financial conditions, vaccine developments and relative growth and inflation bode well for some Dollar upside, the market’s main focus right now is on the Fed’s policy normalization path.
Hey everyone! Welcome to this week's forex forecast for the week ending July 30th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, EURAUD, NZDCHF & XAUUSD.
Price has recently broken out of the ascending channel, and we've already seen a retest and the impulsive move to the downside. However, we're once again seeing price approach the channel's bottom and nearing short-term resistance at 110.6. Look out in the week ahead for price to either break through this level, where it will likely continue travelling inside the channel. However, if we see price fail to break this level and instead reject, we could likely see a new trend form to the downside as this could potentially be the next lower high.
Price has closed off for the week touching and retracing the channel's bottom. Now that price has broken out of the consolidation phase following the ascending channel break, it's likely we could see this ascending channel continue as price heads to new highs to complete the long-term ascending channel pattern. We may get a much clearer touch of the channel's bottom before this move happens, so look out for proper touches and rejections before going long on this pair.
Price is now touching the descending channel's bottom and is already showing rejection to this level. If price continues to fail to break above, this could be a good position to go short. However, this may not be the best idea as looking overall and long-term, price is actually travelling in a bullish flag pattern, and we're currently in the flag, the position right before the impulsive upside move of the chart pattern. If we see price break above the channel, we'll likely see price head higher and complete the chart pattern.
Price is consolidating above the descending channel's top and is currently waiting on some sort of catalyst to make the next month. If price continues to stay above the channel, we will likely see price be bullish and travel higher towards the Liquidity Void at around 1900. However, if price closes back inside the channel, we'll likely see a retest of the bullish OB at around 1750.
Hey everyone! Welcome to this week's forex forecast for the week ending July 9th, 2021. I'm TraderBart with A1 Trading, and this week I'll be looking at USDJPY, EURAUD, NZDCHF & XAUUSD.
Price has recently touched the top of this ascending channel, but since NFP on Friday, we've seen a reversal, and price is already making its way to the next touch of the channel's bottom. This chart is quite empty, no major order blocks or key levels are showing; it's more just basic trend trading at the moment. Price is currently at the previous high before the major break, so expect this level to be confirmed as new support or resistance during Monday.
Price is struggling to break through the resistance at 1.586 after the break of this ascending channel pattern. This is now the third time we've seen price reject this area, and a triple top entry would have been ideal, but I did say I did not expect it to happen. I am waiting on price to once again reach the new support level at 1.566, where I'll be looking out for price action confirmations of rejections and bullish reversal before going long on this pair.
Price has continued to stay below the channel's top following my previous analysis last week here. We did see signs of rejection however, the bearish move did not occur. I will continue to keep my eyes on this pair, and I'm waiting on either price to break out to the upside, make a retracement and use the channel's top as its new area of support before continuing the bullish move, OR, we could see price reject the top now and continue heading to the downside.
Gold has still yet to make any significant moves or breaks, similar to the start of May, where we saw price consolidate in this exact area for a while before a significant move happened. We did see Gold break out of the triangle pattern to the downside, but price retraced higher than it should have, which deems this setup invalid now. Price is approaching the channel's top where I'm looking for a breakout, then enter once price retraces its move and uses the channel's top as a new area of support to go long off.
Over the past couple of years, price has been quite choppy, moving back and fourth between a wide range from 102-116. It looks like price is heading back up towards this resistance level once again, where it's likely we could see price turn back around again or head towards making new highs, breaking past the resistance.
Price was moving in a pretty strong downtrend until the end of 2021, where we instantly saw a reversal and price is now travelling in an ascending channel, breaking previous highs and creating new ones. We did have a slight break of trend in April, however we saw price retrace this move and is back inside the steady ascending channel.
Currently, price is heading towards the channel's top at around 111.5 in this ascending channel. It's likely we could see price treat this as resistance, and reverse, heading towards the channel's bottom; continuing the long-term trend.
We don't really have any order blocks or anything entry wise at the moment, but just based off basic trading lessons, and trading the trend, going short right now wouldn't be a bad idea.
We've got a couple of high and mid-tier news events coming out over the next week or so, including NFP tomorrow at the time of writing this.
We've not had the best NFP reports coming out in the past couple of months, however some analysts are finally seeing a possible comeback as analysts are expecting a 700k jobs increase versus last months 559k gain.
The ADP NFP report beat expectations with a 692k gain versus the 555k consensus. June's Flash Manufacturing PMI climbed from 62.1 to a record high of 62.6, reflecting faster pace of industry growth. Obviously no one knows the report until it's out, however be on the look out for a possible better-than-expected report.
Looking at retail sentiment, most traders are actually short on this pair. Bears are way ahead with 81% being short at the moment, which could actually be a problem as financial institutions will likely try to take out these positions. I can see some short-term bearish moves towards 110.3, however long-term I am bullish on this pair.
The DXY is heading for its biggest monthly jump since 2016 by an impressive US private payrolls report and a hawkish shift by the US Federal Reserve's rates outlook at a meeting held in early June. DXY bulls are also increasingly gathering momentum amid growing concerns over the spread of the Delta variant. DXY is posting gains of about 3% in June against many major currencies such as the Pound, Euro, Yen, Swiss franc and Canadian dollar. All eyes are now on the NFP report coming out tomorrow.
The yen index is down -0.33% on the day and is extending its losses to the downside on weakness in the currency. The Fed's decision to raise rates sooner than we expected has caused US bonds to slip as well, sending yields closer to Japan's bond yields, thus decreasing appetite for the USD.
The Japanese yen index is now falling to a previous bottom around 90.23 on the 4H chart as well as the bottom of a trend line which could also serve as support. As price tests this level again, it could try to break under this time which could then give it enough momentum to dip lower.
UJ looks to be trying to break out of the channel on the 4H timeframe as price nears highs and a big resistance level from the April high of this year. It looks likely that price will at least test this level again, and contrary to the JXY, a break above would be bullish for this pair.
NJ is one of the hardest movers today, up 0.42% at the time of writing this. The pair has a significant resistance level around 77.863 which will be a big level to break. Price might have to retrace before retesting this level due to how strong this resistance looks in the short term.
The US dollar and the Japanese yen is probably one the most interesting pairs in forex due to their traits and behaviors and how they fall into their roles. For example, both currencies are considered safe havens to most investors, but at the same time, they a very fundamentally different. The yen's negative interest rates and deflationary monetary model make the yen looks attractive to lots of investors in times of economic fear. The US dollar's positive and soon-to-be rising interest rates meant to cap 'high' inflation (above 5%) acts as another safe haven investment for most people. But, the fact that the two most opposite extremes seem to be the safest place to put your money is very interesting.
COT data shows a small decrease in the change of long positions on the USD and a considerable decrease in the number of short positions on the yen. There was also an decrease in short and long positions in the SPX500 and US30 in the past week which means little change as of last Tuesday, but the recent sell off in stocks probably will show up on this week's COT as an increase in shorts unless stocks fire past all time highs before this Tuesday.
GDP, Interest Rate, and Inflation Rate:
What we're seeing now is a rise in demand for the USD and a rise in stocks simultaneously, so to help explain this, we can look toward economic numbers. But the Fed promised two rate hikes by 2023... that's not much of a big deal anymore. The US's GDP has seen a drastic increase in the past year- let alone the past few quarters- that we are looking at a rebounding economy which is good for stocks and the USD. Additionally, higher inflation is actually better for the stock market than the value of the dollar, because there's more money in the market due to the Fed's trillions of dollar economic stimulus plan. The overall point I'm trying to make is that sentiment for both stocks and the dollar are bullish for the time being in this transitionary period from low to higher interest rates.
I have shifted my sentiment on the USD that we will see further demand and upside on the dollar, as well as continued buying in the stock market (at least for the next week) although these reasons are more long term factors. My argument stems from the meteoric rise in GDP, currently low interest rates, the promise of higher rates in the future, and the promise of inflation curbing. So, it looks like the steps taken by the US are more impactful than the yen's current state as the Japanese economy remains mostly stagnant at a negative interest rate, inflation rate and GDP. Obviously, we will have to see what's in store for this week and beyond, but that is my reasoning behind what I think.
The stock market reacts to this sentiment as well. The chart above is of the SPX500 and its correlation to the Japanese yen index which is the red colored chart below the candlestick chart. There is usually a mixed correlation between US equities and the yen. When the yen rises, it's a coin toss on where equities will end up. Currently, we are at a negative correlation between the yen and the SPX500 which is probably due to the reasons stated in the fundamental analysis previously in the article.
The SPX500 bottomed out at $4140 for support and is now back up to resistance at a falling trend line better seen on the 4H timeframe. That level is also paired with resistance at $4208, but a close above this level could be a good sign for the stock bulls.
Here is the dollar index on the 4H chart. After a tremendous rise in price, the dollar has pulled back a little bit to support. What we are seeing on this chart and all USD pairs, is a retracement. So, people might start thinking that the shift back to dollar bearishness is here, but I think otherwise. This pullback from recent highs and lows (depending on what USD pair you're looking at) just look like a short breather before continued upside. This level of support DXY is on right now is very mild and should not usually be a key level of support, but due to the recent news and hard uptrend in price, candles don't need too much incentive on the technical side to keep pushing up.
USDCAD on the 4H chart is doing the same thing as DXY where price pulls back to support. 1.23660 is around where our support zone lies so maintaining and bouncing off this level is a bullish sign for the pair.
USDJPY is already moving to the upside on the 4H chart after interest rate news. Demand for the USD might push this pair up above resistance near the rising trend line as price could test all time highs once again. If not, the pair has support at 109.763 and its 200 SMA on this timeframe.
Bitcoin Breaks Big Level, Gold Confused, Yen Hurting
|Mixed numbers reported on the USD this morning as core retail sales missed and the change of price of finished goods and services beat expectations. On the 4H chart, UJ looking like it will try to keep pumping up to the top of the channel and test recent highs around 110.323.|
|Gold price recovers off support on the 4H timeframe, and now it hovers just under resistance. investors are mixed about this metal as the DXY continues to rise even though inflation continues to hurt the dollar.|
|Bitcoin successfully closed above a key resistance level on the 4H which is a bullish sign for bitcoin investors. Price also crossed above its 200 SMA signifying an uptrend for this crypto. I think BTC will keep testing the top of the trend line before breaking above.|