Those of you that followed the charts on Friday would have seen some major major USD strength. The USD/CHF pair, in particular, smashed through a massive, multi- year support and resistance area. This is all mainly due to a very hawkish (rate aggressive) FED. The question now is not if they will still raise rates, but by how many basis points per increase. There were even talks this week that the rate increase in May could be as much as 75 basis points, but there seems to now be contradicting news around this and it seems 50 is on the cards. Who knows….
These ‘aggressive’ hikes from America are now outstripping the rate increases from other countries and you could now see this ‘mismatch’ playout further with USD strength on your charts.
I said in the live session this week that if the DXY breaks and holds 100, it could very easily target 103 and I think this will now be the case. My personal opinion is that it won’t stop there either and that this could be the start of a much longer term trend, in favour of dollar strength. I’m going to be planning around USD pullbacks into key areas to try and ‘get onboard’ and be part of these trends. Be very careful trying to ‘chase’ price, be patient and wait for price to get to your high probability areas.
Some further reading on this: LINK
Forex news this week:
Scheduled news is very light this week, but keep an eye out for the Bank of Japan’s outlook report (interest rates news) and US GDP data on Thursday. As with recent weeks, try to keep up to date with the war in Ukraine. Any major changes here can and will mean major shocks in the market/s.
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EUR/USD: On the daily I’m looking at 1.13400. If you trade the shorter timeframes keep an eye on 1.1000
USD/CHF: Broke a MAJOR area of previous support and resistance and I’m now looking to long. Look for price to now retest that area at around 0.92300.
GBP/USD: Looking at the weekly chart, I’m looking for price to retest 1.3400 for a short
AUD/USD: On the weekly, I’m looking at the 0.7300 area for a short.
NZD/USD: Again on the weekly. I’m looking to short from 0.68400
USD/JPY: ‘No man’s land’ at the moment. Leaving this alone.
USD/CAD: On the daily, I’d look for price to test 1.26600 for a long.
NZD/CHF: On the daily, I’m looking to long from 0.63500
EUR/GBP: On the 4Hour for this one, I’m looking at 0.83600 in order to long.
GBP/NZD: Looking to short from 1.9500 based on the daily.
AUD/NZD: 1.0700 for a long based on the weekly.
AUD/CAD: 0.92500 for a short I’m looking at the daily.
EUR/AUD: Looking at 1.54600 for a short.
YENS: Still too far away from anything.
As always, remember correlation!
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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: