{"id":218206,"date":"2022-08-01T09:59:41","date_gmt":"2022-08-01T08:59:41","guid":{"rendered":"https:\/\/www.forexmentorpro.com\/blog\/?p=218206"},"modified":"2022-08-03T08:06:34","modified_gmt":"2022-08-03T07:06:34","slug":"dollar-weakens-yen-strengthens","status":"publish","type":"post","link":"https:\/\/www.forexmentorpro.com\/blog\/dollar-weakens-yen-strengthens\/","title":{"rendered":"Dollar weakens, YEN strengthens"},"content":{"rendered":"

Hi everyone,
\nThe dust has settled on a very busy and important week of fundamentals, so let’s have a look at what the big picture now looks like.<\/p>\n

We saw the Fed raise interest rates by 75 basis points (in line with expectations) but more interestingly\u00a0were their comments after the release. The two main points that I took away.<\/p>\n

1) They seem to think that they can still avoid a recession
\n-When I was in business school we were taught that two negative quarters meant you were in a recession….but maybe the definition<\/em> has changed? \"\"<\/p>\n

2) They are expecting to relax interest rate increases from next year as they believe that they will have inflation under control by then.<\/p>\n

…I’m not sure the markets believed them.
\nWe saw strength starting to return (finally, some might say) to the traditional safe havens of Gold and the battered Japanese Yen.<\/p>\n

GOLD;\u00a0<\/b>
\n-I’m personally expecting a very big move from Gold. 1800 is a big area of previous support and resistance, but a break above this level could see a dramatic move up -in my opinion \ud83d\ude42\u00a0 Remember that bigger gold prices could also lead to a stronger CHF.<\/p>\n

\"\"<\/p>\n

YEN INDEX: (Yen vs a basket of currencies)
\n<\/strong>A lot of buying pressure flowed into the Yen this week after the US FOMC and GDP news. Although it is still very bearish, I’m expecting some more Yen strength now.<\/p>\n

\"\"<\/p>\n

DXY:<\/strong>
\nThe dollar index looks like it might want to pullback and could<\/em><\/strong> have formed a lower high – It has two areas of previous support\/resistance to break, but if it does I’m expecting those dollar pullbacks we have been speaking about.<\/p>\n

\"\"<\/p>\n

A tip using the ‘spaghetti’ indicator:\u00a0<\/strong>
\nI don’t use the indicator on a daily basis, but a good tip is to have a look at the indicator when doing your weekend analysis. I typically look for pairs ‘crossing’. The more ‘extreme’ the difference, the better (Very high vs very low).\u00a0 In the example below you can see the YEN crossing above the GBP, presumably showing YEN ‘strength’ vs GBP ‘weakness’. You still need the technical setup on the chart, but if you were looking for GBP shorts vs the Yen this can provide some additional confidence in your analysis. Also remember this doesn’t necessarily a quick change and could play out over a few days or even weeks.<\/p>\n

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FOREX NEWS:\u00a0<\/strong><\/p>\n

It’s the start of a new month and that means a busy week ahead. We don’t recommend trading on Friday’s, but this week you really really<\/em> shouldn’t as it’s non-farms. Along with FOMC rates this is the other BIG one. On Thursday we also have British interest rate news, so be very careful around that as well. Another reminder that the AUD news is usually ‘on tap’\/ available for consumption before the event. (It, however, doesn’t mean that there can’t be any surprises).<\/p>\n

\"\"<\/p>\n

++++++++<\/p>\n

Trade for clients & receive a substantial profit share<\/p>\n

If you want to receive a substantial profit share you only need to make 3 to 5% per month. You can find a copy of the brochure here: Trade for Clients<\/a><\/p>\n

++++++++++++++<\/p>\n

MAJORS
\nMost of the majors are showing signs of $ weakness or pullbacks. What I suggest is that you keep your eyes open over the next few weeks for Earth & Sky setups that allow you to ‘ride’ the dollar pullbacks into the A grade M2 setups.
\n<\/strong><\/p>\n

EUR\/USD: Short from around 1.0400 and 1.088<\/p>\n

USD\/CHF: Long from around 0.94800<\/p>\n

GBP\/USD: 1.2800 short is my A grade, but shorting from the current position does look interesting. I’d keep an eye out on the 4H candles on Monday.<\/p>\n

AUD\/USD: 0.700 is the key level with this pair. I would look to short from 0.71500<\/p>\n

NZD\/USD: Looking to short from 0.6600. Also at a key area at the moment.<\/p>\n

USD\/CAD: I’d look for longs from 1.2750 and 1.25600<\/p>\n

USD\/JPY: See video for my thoughts.\u00a0<\/em><\/p>\n

CROSSES<\/strong><\/p>\n

EUR\/GBP: Short from 0.848000<\/p>\n

EUR\/JPY: 135.500 for a long, but I wouldn’t be too greedy with the take profit. A grade long at 129.000<\/p>\n

EUR\/CAD: A grade for me is 1.37500.<\/p>\n

EUR\/NZD: Long from 1.64500<\/p>\n

AUD\/CAD: Short from 0.91200<\/p>\n

GBP\/AUD: Short from 1.79200<\/p>\n

AUD\/NZD: BIG countertrend short from 1.12300<\/p>\n

AUDCHF: Short from 0.67400 again<\/p>\n

NZD\/JPY: Short from 84.400 based on the 4H chart.<\/p>\n

As always, remember correlation!!<\/strong><\/p>\n

We are NOT a \u201ctipping service\u201d our aim is to teach you how to trade for yourself.<\/p>\n

\"\"<\/a><\/p>\n

Watch the video below for more detailed explanations of this week\u2019s analysis and trade plan (click the 4 arrows bottom right to view full-screen):<\/p>\n