The week ahead

by | Nov 7, 2022 | Forex Analysis

winner

Hi everyone,

There was positive USD news this week with good job figures and another 75bp hike. We, however, didn’t see this reflecting in the charts and actually got a little USD selloff on Friday. I’m still of the opinion that we will get a USD pullback, but fundamentally you want to use this pullback to get in on USD trades at better prices. i.e. dollar strength.  Powell also said on Wednesday that it was “Very premature to even think about pausing” referring to USD rate hikes. The DXY chart is also giving us a clues that we could get a pullback. Remember that a USD pullback will benefit many asset classes across the board.

In other news this week the GBP sold off across most pairs after the Bank of England’s largest rate hike in 33 years…the problem…. the BoE suggesting that rates won’t be hiked as high as previously thought. The BoE also mentioned that the U.K. is already in recession and that “and that significant headwinds remain”

THE GBP/NZD setup we were looking at: ‘Easily’ broke MULTIPLE reasons for the stop

Finally for this week we saw the RBA (Reserve bank of Australia) hike rates by 25 basis points. This of course doesn’t match up to the Fed and BoE’s 75bp increase. If the RBA continues with lower increases than its peers, we can start looking for long term AUD weakness.

DXY CHART
Working to plan as per my last weekly analysis post. Broke 110 and pulled back to around 112. Big selloff on Friday (worst single-day drop in 7 years) and I’m now looking at it making a lower low. It could also easily struggle at the 55, so wait for closes.

Energy & Commodity Prices;


Gold;
A nice bump on Friday due to a mini USD selloff. Still looking for a break above 1800 to change my bias

Oil;
Also benefited from USD weakness on Friday. Testing the 200 again now. Break above 110 would change my bias.

Bitcoin;
Still in a range. Decent week for crypto in general though.

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Red flag news:

Slow news week, but watch out for US inflation news on Thursday (GMT +2 below). Inflation figures are still VERY important in the current conditions and some pairs could be hypersensitive to this release. Also, not in the events noted below, but Tuesday is the US midterm elections. There could easily be some extra volatility around this.

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MAJORS
(See this week’s video for the countertrend ideas)

EUR/USD: Short from 1.040. On the smaller timeframes keep an eye on parity. (See video)

USD/CHF: Again parity is big. A grade long from 0.96500. On the smaller timeframes 98.500

GBP/USD: A grade short 1.215.

AUD/USD: A grade short from 0.68700. Smaller timeframe 0.65200 to short.

NZD/USD: Short from 0.62500.

USD/CAD:  A grade long 1.3100

USD/JPY: Long from 134.500 (miles away). Smaller timeframes 144.00

CROSSES

EUR/GBP: I’d look to long on a pullback from 0.86500

EUR/NZD: I hope some of you got the countertrend short from 1.7400?  Long from 1.6800 but I need some bullish signs (see video)

AUD/NZD: Short from 1.09400 targeting 1.0800. I’d also look to long form this price point.

AUD/CAD: Short from 0.89700

GBP/AUD: I’m looking for a break below and pullback to 1.74700 for a short.

GBP/NZD: Short on a pullback to 1.9400

GBP/CAD: Short from 1.5800

GBP/CHF: Short from 1.1675

AUD/CAD: For those of you with more screen time. On the 1H chart I’m looking to long from 0.8700 targeting 0.87900

As always, remember correlation! -Especially when taking more than one JPY trade!

We are NOT a “tipping service” our aim is to teach you how to trade for yourself.

Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):

Regards
Thinus

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