There are a few volatility events being released this week for the USD, which we will need to keep an eye on. My overall bias is a bullish one for the USD, as I believe in current times it is going to show its strength coming out of the pandemic. While all the releases are lagging macro indicators, they will still bring strong movement into the market and need to be accounted for.
Consumer Price Index, while the past 3 months has proven good results for the USDs CPI, the recent forecast predictions are a sign that they are predicting it to slow. The forecast produced is half of Decembers release figures. I do believe the actual will be greater than the forecast; however, having such a drop in confidence is a worrying factor to macro traders.
Producer Price Index, Unlike the CPI, I sit in a more confident position in assuming that the PPI can increase the bullish strength in the USD.
Retail SalesJanuary isn’t usually a great time for retail sales as everyone calms down after the holiday period. However, a low ball forecast of 0.0% could make for catching people into thinking the sales are bullish.
At this current time, I expect a continuation of the actual trend, which is bearish on Silver.
Key Levels:
Resistance 23.50
Support 21.50, 19.50
Trend XAG/USD
Bearish
Price has sat in a channel since July 2020 and is not testing the demand for the product. After testing this level many times over the past 8 months, I can see the demand drying up as the USD gets stronger. We have a free $2 worth of movement where no supply or demand zones have sat for years if we manage to break this 21.50 zone.
Call to Action/Trade Idea
We will look for any opportunity to join the bearish trend. If we find that the price can’t break the current support of 21.50, await confirmation, then trade to the 19.50.
The BOJ outlook report is one of the strongest movers of the JPY we have seen in recent years. While the report is tentative, we do know that it will be released on Tuesday. Keep your eye on this report as it has the power to change trend direction.
At this current time, the daily trend is bullish and I expect it to continue.
Key Levels:
Resistance 115.600
Support 113.500
Trend USD/JPY:
Bullish
Price has just completed a strong pullback before either a continuation or a change in trend direction.
Call to Action/Trade Idea
We will look for any opportunity to join the bearish trend with a good RR moving up into the drawn supply zone. Keep your eye on the BOJ report as it can change this analysis drastically.
The major news which will move this pair this week is the Consumer Price Index for the AUD. This result gives a major indication on inflation within the economy. With fuel and housing prices showing no sign of slowing down, I can see this release triggering a RBA cash rate meeting. Keep your eye on this release, I think their expectations are set too high and the market will be disappointed.
Key Levels:
Resistance 1.58500, 1.59000
Support 1.56000
Trend EUR/AUD
Sideways
Price has been consolidating for the past few weeks and I am expecting this to continue. We are approaching a strong supply area and given the current climate of the currencies, I can see this supply zone being too strong for the price to break.
Call to Action/Trade Idea
We have entered the supply zone on the 4H chart, look into the 1H and start to build a trading plan, look for Lower Lows, trend line breaks and chart patterns which point towards the downside, then short to 1.56000.
The major news which will move this pair this week comes at the end of the week. NFP. I ideally would prefer this trade to be completed by then, however if it is not, I will likely ignore the idea.
Key Levels:
Resistance 115.600, 116.400
Support 114.800, 113.600
Trend USD/JPY
Direction Change 4h
Price has just completed a higher low and a higher high, confirming that we may be seeing a strong trend change on the 4h chart. With the power of the bulls creating the new high, I can see a minor pullback then a trend continuation.
Call to Action/Trade Idea
Wait for the USDJPY price to come into the most recent demand area, then dive into the lower time frames to find a bullish entry point.
The major news which will move this pair this week is the Consumer Price Index for the USD. It is coming at the end of the week and usually doesn’t impact the price movement too much. I can’t see this affecting our analysis at this stage.
Key Levels:
Resistance 1.36200, 1.35800
Support 1.35110
Trend GBP/USD
Bearish
Price since mid January has been moving towards the downside, halting and forming a large pull back on the 1h chart. While this pullback did retreat into a supply zone, it formed a strong push below the most recent low and has begun forming another pullback.
Call to Action/Trade Idea
Keep an eye on the pair to retrace its steps back up into the most recent supply, there was a strong push from that area. If we find our way into that zone, head into the 15m chart and look for entries to go short.
In today’s trading room, we analyzed the charts for the upcoming week. We start with the higher time frames and then check the lower time frames to look for intraday opportunities.
We analysed the DXY after the huge vitality moves that occurred last week. The Dollar still remains strong in the short term, but any large movement down can change the perspective.
We also make a small explanation of the market cycle and pattern identification. There are some pairs that it’s better to stay away from for better zones on a daily chart.
Finally, there are some important moves at the end of the week on the CAD, AUD, and USD pairs
We have a few pieces of news coming out for the USD at the moment, but there is one thing everyone is watching and anticipating. We have seen a volume drop and a lot of people selling out of the stock market predicting that an invasion may occur in the coming weeks. Keep this in mind, the markets could act crazy on new information.
Key Levels:
Resistance 1.28000, 1.28800
Support 1.26500, 1.25700
Trend USD/CAD
Sizeways
Price since mid January has been moving sideways, we have had some big pulses in either direction but nothing too convincing. It looks like the market thinks it may be evenly priced at this point in time.
Call to Action/Trade Idea
Keep an eye on the pair to see if we can break and retest the upper trendline of this channel. Once broken, trade to the supply zone.
We have a few pieces of news coming out for both pairs at the moment, but I think there is one major play everyone is keeping their eye on. With money flooding out of the EUR, it is shaping up to be a potential bargain for low-cost stocks if war breaks out. Keep an eye on the news this week while trading the Euro.
Key Levels:
Resistance 1.40800, 1.42000
Support 1.39000, 1.38000
Trend EUR/CAD
Bearish
Prices have been moving in a strong and stable downtrend for the past month with the current state of world economics. We have recently broken structure, however, to the upside on EURCAD, which is indicating a potential trend change.
Call to Action/Trade Idea
Keep an eye on the pair to see if we can break and retest the trend line. Once broken, trade to the recent highs or hold long term.
This release is the broadest measure of economic activity and the primary gauge of the economy’s health. They are forecasting a large increase in the final GDP, with retail sales being down as a whole over the christmas period I am unsure on the confidence for it to hit the overall forecast. We did have a spike during February, but still not confident.
Looking for a definite increase in the GDP, but falling below the levels forecasted.
Key Levels:
Resistance 1.10300, 1.11000
Support 1.09400
Trend EUR/USD
Sideways
Prices have been moving in a stable channel for the past month with the current state of world economics. We have recently broken the structure to the downside on EURUSD which is indicating a potential trend change.
Call to Action/Trade Idea
Keep an eye on the pair to see if we can break the weak demand area, then look for potential long plays from the strong demand zone.
Big news coming out for the AUD this week, while usually the Cash Rate itself is already priced into the market, the RBA statement can give a lot of insight into where the economy is heading in the future. Short term interest rates are the paramount factor in currency valuation, so expect a volatile AUD.
Looking for a positive outlook on AUD.
Key Levels:
Resistance 1.47820, 1.49200
Support 1.47000
Trend EUR/AUD.
Short-term Bearish
Price of the EUR has been one of the most volatile currencies available with the war raging between Russia and Ukraine. We have recently seen some positive talks between the 2 countries resulting in a pullback of the EUR against the AUD. But given the outlook on AUD I believe this pair can still head down to retest the recent lows.
Call to Action/Trade Idea
If price returns to the recent supply area, look to short on confirmation of bearish power to 1.465
Big news coming out for the GBP this week, firstly we have the unemployment rate which is forecasted to be positive for the GBP. Recently the UK has seen a decrease in unemployment showing the fast recovery post covid lock downs. It is also forecasted to see high growth when it comes down to the CPI pushing the GBP up in value.
Looking for a positive outlook on GBP.
Key Levels:
Resistance 1.64600, 1.65000
Support 1.63400
Trend GBP/CAD.
Bearish
Price of the pound has been in a steady downtrend but I believe we may have hit the bottom and look for a potential bounce higher.
Call to Action/Trade Idea
If price breaks the second “BOS?” and returns to the recent demand area, look to go long on confirmation of bullish power to 1.67
NZD Consumer Price Index is due to be released on the 21st of April. Forecasters are predicting the data to be up about 0.6% from the previous, there are very bullish forecasts for the NZD which may see this chart and trading idea retrace perfectly.
Key Levels:
Resistance 1.93500
Support 1.91000
Trend GBP/NZD.
Bearish
Overall trend recently has been to the downside on the pair, but given the strength in the upside pushes recently I think we are going to witness a trend changing movement.
Call to Action/Trade Idea
Wait for price to retrace back down to the local demand area, watch for a confirmation on the lower time frames and then push higher to the 1.96 mark.
USD raised its rates in March and signalled 6 more hikes in the near future. These are very bullish signs for the USD whereas the RBA has dropped “Patient” from their policy statement signalling a possible 2022 hike.
Key Levels:
Resistance 0.745
Support 0.718
Trend AUD/USD.
Bearish
Overall trend recently has been to the downside on the pair, I think this trend will continue into the near future and breaking lower lows as it moves.
Call to Action/Trade Idea
Wait for price to retrace and test the demand for the product, if demand is weak, join the force pushing to the downside.
AUD is showing weakness as the RBA are ready to start hiking rates, this data is usually already priced into the market but it is the meeting minutes which indicate where we are heading into the future. Also expecting lower retail sales data later in the week.
CHF is looking rather bullish, on the other hand with not much room for the Monetary Policy to ease the outlook is rather Dovish. The data releases do remain weak but with stocks heading lower I can see money flooding into the CHF.
Key Levels:
Resistance 0.698
Support 0.685
Trend AUD/CHF.
Bearish
Overall trend recently has been to the downside on the pair, I think this trend will continue into the near future and breaking lower lows as it moves.
Call to Action/Trade Idea
Short AUD ahead of interest rate decisions and retail sales data, keeping a close eye on the reaction of the market.
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GBP has been producing some weaker data as of recently and I expect it to continue. The BoE have hiked their rates for a 4th time but have signalled there is less to come. A dovish hike and mixed data reports is giving a bearish tone for the currency.
JPY on the other hand has had a recent re-evaluation after the steep runs. Potential profit taking moving the market. Rising rates and the central bank’s level of hawkishness could drive stocks lower, therefore driving the JPY higher.
Key Levels:
Resistance 159.00
Support 156.400
Trend GBP/JPY.
Bearish
Overall trend recently has been to the downside on the pair, I think this trend will continue into the near future and breaking lower lows as it moves.
Call to Action/Trade Idea
Wait for a pullback and a fair value price to enter short on this pair for the short term future.
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GBP has been producing some weaker data as of recently and I expect it to continue. The BoE have hiked their rates for a 4th time but have signalled there is less to come. This idea has been forming for weeks now and the bullish power is clearly weakening.
JPY on the other hand has had a recent re-evaluation after the steep runs. Potential profit taking moving the market. Rising rates and the central bank’s level of hawkishness could drive stocks lower, therefore driving the JPY higher.
Key Levels:
Resistance 161.300
Support 158.800
Trend GBP/JPY.
Bearish
Overall trend recently has been to the downside on the pair, I think this trend will continue into the near future and break lower lows as it moves.
Call to Action/Trade Idea
Wait for a break in trend line and a fair value price to enter short on this pair for the short term future.
