Weekly Forex Forecast (01/08/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

Weekly Forex Forecast (01/08/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

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hey traders john fortune here with this week's  weekly forex forecast hope you're having a   fantastic weekend last week was a big week in  the markets we had some very important data   coming out of the us and what was interesting was  the data was negative but we saw stocks rally so   what does this mean for the markets does this  mean that the risk of a sell-off in stocks   has disappeared i would argue no we're going to go  through in today's video exactly what i think is   coming next not just for forex but also for stocks  and markets in general okay so let's look at the   very important data that came out last week we had  an interest rate rise out of the us it was in line   with expectations from 1.75 to 2.5 but this was  into what it was a rate hike into a recession   now there is a very outside possibility that gdp  gets revised positive i think that's unlikely and   it is in fact the case that the us has been in  a recession since january some people like to   try and change the meaning of that and say well  the labour market's strong etc but the problem   is the labor market is one of the last things to  go usually so i would very much expect cracks to   start to appear in the labor market in the near  future and this makes this an unprecedented time   because very often before the economy gets into  a recession the fed pivots and actually prevents   a recession by easing or loosening monetary  policy this time we are confirmed as being in   a recession in the u.s and we're talking about  the us here because it's the world's largest   consumer so if the us goes into recession the  world will go into recession but we have an   unprecedented situation where the fed is hiking  into a recession and it's doing this to control   inflation which has started to get out of hand now  the other very important piece of data which may   have gone unnoticed last week was core pce price  index the headlines very often talk about cpi   which is of course the headline inflation print  but the federal reserve's preferred measure   of inflation is core pce so that's personal  expenditures for the consumer but stripped out of   food and energy so x food and energy so core pce  and this actually came out month over month not   just higher but higher than expected so we're  in a situation where gdp has contracted the us   is in a recession already and at the same time  inflation is still rising even by the fed's own   preferred measure of inflation which is the core  pc price index so the idea that the fed is going   to pivot and we're going to get a big rally in  stocks and everything is going to be great again   seems extremely unlikely unless the federal  reserve is prepared to let inflation spiral   out of control which they are not they've stated  many many times they are not prepared to do that   and that they're prepared to control inflation at  the expense even of growth and if we look at the   last rate statement that came out of fomc on the  27th of july the fed themselves are saying that   they anticipate ongoing increases in the fed funds  rate so last week we had the u.s in a confirmed   recession inflation still increasing by the fed's  own preferred measure and the fed themselves   telling you that they anticipate further hikes  in interest rates that is not a good fundamental   outlook for the stock market if we jump ahead to  this week there is also some very very important   data to pay attention to the ism manufacturing  pmi we don't usually look at this but it's getting   very close to the 50 level which would signal  a contraction in the economy if this comes out   unexpectedly not just below forecast but below 50  that is going to be compounding the situation you   have in the u.s and that again is going to be  very very negative for stocks because a lot of   institutional investors use isn't manufacturing  pmis as part of their investing framework so watch   out for that next week and we also have next week  as well the services pmis which again watch out   for this if not next month in the coming months  to dip below 50 and add another very important   piece of data confirming recessionary conditions  in the u.s so we're not below 50 in services pmi  

or manufacturing pmi but look out for that over  the next couple of months we also have next week   very importantly interest rate decision out of  australia so we're going to look at the aussie   currency today which is something that i am  interested in next week but it will be from   tuesday onwards and finally we have an interest  rate decision out of the uk on thursday and   we also have non-farm payrolls out of the us on  friday okay so let's have a look at the scorecard   ten into this week and you can see here something  very very interesting once i added in all of the   data out of last week which included all the  important data just discussed you can see the   forex markets did not like the data that came out  last week unlike stocks which rallied and i think   personally this is probably a bear market rally  which is going to suck in new buyers before   rolling over and we're going to discuss that  more in today's video but unlike stocks the forex   market did not like that data and we went very  risk off when you see all currencies including the   us dollar weakening on a one-month forward-looking  basis and only the yen appreciating that is as   risk off as it gets in forex so all those stocks  rallied last week the forex markets said no we're   not having that that was not good and when we  input the data as well to the commodity scorecards   and also the yield curve scorecard which i also  do for the us they also did not like the data   last week it was only stocks which rallied and  went risk on alongside crypto of course which   is basically just high beta version of stocks  but the commodity markets the bond market and   also the forex market did not like that and it's  one of the main reasons why i think stocks could   start to roll over in the near future okay so in  terms of the markets i'm going to be looking at   trading in forex next week really there's not  much that needs to be discussed here because   the swiss franc is clearly the only long in town  as it currently stands and if you remember last   week euro franc was the number one market that i  was looking at trading and it was a great short to   the downside last week again i think swiss franc  is set to outperform and that is my favorite long   and i'm going to be again looking at eurofrank  to the downside because the euro is currently   scored as the weakest currency on a one four  week forward looking basis and i'm also going   to be interested in pound franc to the downside  because there's not too much on offer in terms of   what we're looking at here i am going to also look  at some of the other commodity currencies like new   zealand and cad to the downside against the swiss  franc we'll also even have a look at us dollar   versus the swiss franc although it's not my  favorite my second favorite long is the australian   dollar but you can see it only just about clears  the bullish to neutral score it's only the swiss   franc which has not just a bullish score which  is two and above actually has a strong bullish   so i am going to look at some aussie pairs and  that's going to be after the interest rates on   tuesday but they will be against the very weakest  currencies because the aussie itself is not that   strong so i will look at euro aussie and pandora's  in today's video and finally if you really want   although not one of my favorite trades because  the yen is still currently weak but based on the   momentum we saw last week and anticipating the yen  to continue this way we can look at maybe one or   two yen pairs such as again only the weakest i  would be interested in euro yen to the downside   and perhaps pound yen to the downside okay so  let's have a look at the individual currencies   themselves starting with the dxy as it currently  stands the dxy is just correcting the dxy really   hasn't done much in the last one two three four  five six seven eight nine ten basically two to   three trading weeks but there is no momentum to  the downside here this is just a correction and   what it looks like is actually when you have waves  within a market very often they alternate in form   between shallow and deep and you can see the first  correction here was shallow in form and it looks   to me like we just simply have a deeper correction  that's the alternation the law of alternation   goes from shallow to deeper it doesn't always  happen of course but very often you see this and   it does in all probability look like we're going  to get another rally to the upside in the dxy if   that's the case is that risk on or risk off that's  risk off and again it's another piece of evidence   to suggest that this recent rally in stocks could  be in trouble so i am bullish overall on the dxy   it is in a full-blown bull market but  at the moment it's just correcting   next is the euro again very much just like the dxy  but the opposite we've just been correcting and   again i just view this as a near-term correction  i think we could come up a bit higher and look   for a test of this low over here and remember  this what we're looking at here because this   is something you're going to see come up again and  again and i think explains what we could be seeing   in a number of the markets in terms of  risk on a risk off that is a very small   one possibly two weeks of risk on as we see  and i would imagine maybe just one week and   don't forget next week is the first week of  the month what happens the first week of the   month very often you get a correction because if  you have a monthly candle for example like this very often they will have a wick on each end and  the first one is usually if the market is coming   down like this you get that first week in the  month which corrects very much like we're seeing   here possibly into the previous low then you get  the sell-off two three weeks and then right at the   end of the month you get some profit taking and  that causes the lower candle this is what i think   we could very well be seeing in a number of the  markets and in euro dollar that would be a test   of the low first week and then start to roll over  towards 0.99610 in subsequent weeks keep this in   your mind as we go through the markets because  if this is the case if we're going to get one   maybe two weeks of risk on before rolling  over into risk off that is going to permeate   all of the markets it won't just be eurodollar  next is the pound i am bearish on the pound this   is technically still structured to the downside  although i did know recently we've been lacking   a bit of momentum but we're also lacking momentum  to the upside there's no explosive move here and   if we are heading higher in the dxy i anticipate  the pound to come down so i'm looking for declines   in the pound next is the swiss franc the swiss  franc is still making higher highs and higher   lows although it's not in a full-blown bull  market we don't have really strong momentum   as we do in the dxy you can see though there's  a very good chance we're probably going to come   up and test this high and then on to the 1.0625  so this opportunity next week is where i think   the best chance to get paid is and the scorecards  are telling us the swiss franc really is the best   place to look to make money next week the japanese  yen you can see we did get a little bit of and   this could be the start of a bigger short covering  rally i'm not bullish on the yen per se that's why   when i discussed perhaps euro yen and poundian  i'm i'll only be looking at the very weakest   currencies vis-a-vis the end because the yen is  not particularly bullish perhaps we come back   and re-test the 0.007 here in the end and that of  course would be a re-test of the major breakout  

next is the cad and the cad is really just not  going anywhere i mean this is technically speaking   just neutral and this is more or less reflected in  fact in the one-month forward-looking scores which   is basically telling us as it currently stands  this is probably just going to continue to correct   over the next one to four weeks and this is  not particularly bullish it's not particularly   bearish as it currently stands and it's probably  going to remain that way in the near future next   is the aussie we do have the interest rate  decision next week so based on what comes out   of the interest rate decision you could see this  go either way because the australian dollar is the   second strongest currency after the swiss rank i  would still favor long positions vis-a-vis other   currencies so if we get a correction like this and  then on the interest rate decision we break higher   that would be opportunity to look for pullbacks  and perhaps we come back and retest this and this   just becomes a big range in the australian dollar  and this move post interest rate decision would   be the opportunity to short pandors in eurozy and  last but not least we have the new zealand dollar   we've had one two three four five six seven eight  nine 10 11 12 weeks of correction and we've barely   gone anywhere which is a very small correction in  these 12 weeks compare that to these 12 weeks to   the downside you can see this is impulsive this is  telling you the market's more likely to continue   here this is corrective so i am looking for the  declines in the new zealand and it is a market   that i'd be interested in shorting primarily  against the swiss franc but in general i would   favor new zealand shores okay so let's have a look  at the markets themselves starting with crude oil   crude oil is an overall downtrend i am looking for  the declines and have been for the last couple of   weeks however again just like a lot of the markets  we've really just gone nowhere we corrected and   last week we attempted an inverse head shoulders  breakout in a downtrend which of course is a   bad idea to buy generally speaking over the long  run that's not going to make you money so for us   looking to short this this is a good opportunity  to see if we can capitalize on the mistakes of   these traders who tried to pick the bottom here  essentially by buying this inverse head and   shoulders and now this has been rejected down here  look for the market to break down with momentum   and that would be the opportunity once we break  through like this to look for shorts down into the   8932 so i do like crude oil next week and i think  if we do sell off here this is going to add weight   to cad shorts alongside the fact that the canadian  dollar has also reduced its score in the one month   forward-looking scores next is eurofrank this  was a fantastic short last week i this actually   made my week this currency this was actually my  best market that i traded last week and you can   see we had one two three really good sell-offs in  this market we took out the target and then some   heading into this week we're looking to maybe  make a very mini double bottom so any pull back   look for the market to correct and any pullback  is viewed as an opportunity to look for shorts   once again into the 0.9652 next is cad frank  you can see cad frank has been making its way   to the downside but it's lacking momentum lack  of momentum i think we could actually start to   see this sell-off because of this as the buyers  eventually capitulate any pullback in this market   therefore is viewed next week as an opportunity to  look for bullish reversals sorry bearish reversals   to the downside i'm going to be looking at  shorts into the 0.7364 next is new zealand frank   now we've had a long correction here because  we had such a strong sell-off previously   and we do now look to be breaking out of this  and again very similar to what we looked at   in cad frank i think when you start to see the  market declining like this and there's a lack   of momentum at the beginning you tend to get a  steeper sell-off because the buyer's capital i   think we could potentially see that next week  so any pullback in this market is going to be   an opportunity next week to look for bearish  reversals and i'm going to be looking first of   all down to the previous low but i would like  to see this come down overall to the 0.5798   next is pound frank this was the market actually  i looked at shorting last week but i didn't get   much out of it and this week it's highlighted in  blue instead of gold because we have the interest   rate decision out of the uk on thursday so i  prefer these three markets but any pullback in   this market especially if we correct into the  interest rate decision and then we sell off   that would be opportunity to look for pullbacks  and then further declines on to the 1.1496 and  

last and in this case in fact least as well is us  dollar swiss rank not highlighted in gold because   i prefer the risk on currencies versus the frank  us dollar swiss franc is two risk-off currencies   and so that's why it's not highlighted in gold but  if we do correct in this market any pullback next   week is simply viewed as a potential opportunity  to look for shorts into 0.9443 next is your aussie   highlighted in blue alongside pound ozzy because  we have the australian interest rate decision on   tuesday i would like to see this pulling back  and then because i have an overall bullish bias   because of the scorecards on the aussie i would  like to see this sell-off on tuesday that would   set up a great opportunity to look for pullbacks  into the 1.4329 so keep an eye out for this but   i do like it but it has to be after tuesday pound  ozzy i also like this but again won't be trading   it until the interest rate decision i like it less  because we also have a uk interest rate decision   so two interest rate decisions in the week it's  not fantastic i prefer your aussie that's what   i'll focus on but if you do get a reversal to the  downside on tuesday there may be an opportunity   to thread the needle into thursday for further  declines down to the previous low and then on to   the 1.7174 and finally we'll look at a couple of  yen pairs euro yen and pound yen euro yen is my   favorite market that i'm going to be looking to  trade against the end if the opportunity arises   it's probably to be honest with you because we  have a uk interest rate decision it's probably   the only yen pair i'm going to personally look  trade we do have momentum to the downside so any   pullback next week look for a bearish breakout  or reversal to the downside and i'm going to be   looking for shorts into the 134.75 i do like euro  yen next week based on the momentum we're seeing  

in the pro scorecards for the japanese yen and  finally pound yen it is highlighted in blue to   remind you have a uk interest rate decision but  again that's not till thursday so perhaps there's   an opportunity to thread the needle between the  start of the week and the interest rate decision   any pullback is going to be viewed as an  opportunity to look for bearish breakouts   into the 160.39 okay so let's have a look at gold  silver and bitcoin and then we're going to look at   stocks and just discuss the stock market a little  bit as well in terms of the gold silver ratio you   can see we were coming up to the previous target  here and we just rolled over and sold off and this   was because we saw an outperformance in silver  last week and this is not really informative in   my opinion because this is a sell-off yes maybe in  the near term it corrects like this and then comes   down again overall i think this is just telling  us that basically there's no clear favorite now   between gold and silver and especially if this  starts to pull back in range you can basically   short gold or silver without having a particular  preference in either of them as it currently   stands maybe in the near term you actually have  a preference in shorting gold even because it is   coming down against silver at least for the time  being so the first one we're going to look at is   gold and gold is not highlighted here neither  is silver as one of my favorites why because   the dxy pairs i'm currently waiting because the  correction in the dxy hasn't finished we haven't   started to move and the scorecards are still  currently neutral but what i do think is coming   in gold is as the market continues to rise  remember what we discussed in euro dollar   as well the market comes up maybe for a week or  two tests the underside of the previous low which   is just simply a stair step in a downtrend and  this is where we could see the first week of the   month basically print the wick and then we could  see the decline over the month and you can see   this is taking place now in gold as well as euro  dollar so perhaps in the near term we trade into   the 178 731. i'm not going to be looking to  buy this as it currently stands i'm focused   on the shorts but it needs to break down first  and again that might not be next week this may   take a week or two to take out the high and then  start to roll over so watch this previous low   in gold because that is where we could start see  this roll over to the downside and coincide with   the next rally in the dollar next is silver so  what's happening silver we had a big risk on move   is the downtrend over in silver well maybe but  we would need to clear this previous low first   as it currently stands this is not a bullish chart  we're below the 21 45 which was the major breakout   to the downside the dxy looks like it's set to  put a new high in and silver is actually just   approaching the previous low in a downtrend so  again i wouldn't be surprised to see this rising   on a little bit of risk on sentiment over the next  week or so but overall what i'm looking for is for   the market to trade into the previous low and then  i'm going to be looking for the market to roll   over and break to the downside and this would be  the first opportunity to start to look for shorts   once again but that's not going to be next week  and it may actually be a couple of weeks for trade   silver again and finally what about bitcoin again  another market which is essentially inverse with   the dollar because it's priced in dollars like  silver like gold that we're looking at here like   euro dollar and this market is also approaching  its previous low in a downtrend i've highlighted   the fact that this should be considered just a  bear market like we looked at in new zealand frank   big sell-off takes longer to correct and if you're  going to be long bitcoin you really run the risk   of trading into this previous low and rolling over  so there's multiple charts here where i would not   be surprised to see them come higher on a little  bit of risk on sentiment over the next week or so   and then potentially run into some trouble and  roll over and that would also fit the mechanics   of how monthly candles are printed so unless or  until we clear these previous lows and ideally do   it with momentum i think the bigger risk for these  markets is to the downside i think the bigger risk   is for risk off to come into crypto and stocks in  the near term and so i am still currently focused   on further declines in these markets including  bitcoin for the time being okay so let's wrap   up the video by having a look at u.s stock markets  to see if they fit in with what we've discussed in   this video so far starting with the spx you can  see the first thing to note here is this orange   level why is this important this is one of the  major implied volatility ranges and it's the upper   bound of the implied volatility range of the spx  and this is a range which is implied through the   options market and it acts as a natural barrier in  stocks and not only the spx but you will also see   the nasdaq the dow jones and the russell have all  traded into their upper implied volatility range   the last time this happened when all four of these  stock markets traded into their implied volatility   range it was the low of the range on the 16th and  the 17th of june so there is a strong reason for   stock markets in the u.s to start to roll over and  this would be really a decision point for stocks   if we were to blow through these levels with  momentum and especially if we started to correct   and maybe test the oversight that would be a sign  actually that the bear market probably is over   i think based on everything we've discussed we  could very well see just as i looked at in the   dollar pairs for example one or two more weeks of  risk on sentiment and i think possibly even one   maybe we just get a rally next week and then  we get poor non-farm payrolls data and that   catalyzes the reversal to the downside in stocks  and also the dxy to the upside just an idea   we'll have to wait and see how things play out  but we are approaching in stocks just as we're   approaching those other markets kiev resistant  which could turn the market and start the next   risk off move we're also approaching those levels  in stocks so keep an eye out for the 4177.51 i   wouldn't be surprised to see this coming up and  testing this level that is going to be a very   significant area to start to see if stocks roll  over to the downside you can see in the nasdaq   we've also tested the upper bound of the implied  volatility range and we've taken out already the   previous high over here so again perhaps we come  up a little bit higher over the next week or so   and if we start to stall out and then break back  down below this level that's going to be a sign   that the next sell-off to the downside is in place  the dow jones has also taken out its upper bound   again perhaps we rally a little bit higher  on some near-term risk on sentiment into the   previous highs but just as those other markets are  approaching the undersides of their previous lows   these are also trading into resistance areas  and finally the russell which just ticked   the upper bound of its implied volatility  range before the whole thing resets again   into the next month and that was all for  stock indices therefore taking out their   upper bounds so again i wouldn't be surprised  to see a little bit more upside into the 19 18.4  

but we are approaching areas now where we could  roll over in the next week or two and again   just as we discussed in the other markets  that would print a potential down month   in these markets in terms of the next monthly  candle to be printed and the final thing i want to   leave you with is the vix because the vix itself  is also approaching a very significant level   at the 1845. if the vix comes down and sells  off into this level perhaps next week and   this sell-off into the 1845 coincides with  the re-test of the lows in the dollar pairs   with the test of the previous resistance areas in  stocks and we start to bounce from the 1850 which   i think there is a very good chance i believe  all of these things are painting a picture of   where the next big risk-off move could start not  just in stocks but in markets in general so that   is it for me for this week guys i've laid out for  you exactly why i do not think the rally equities   as of yet should be treated as the end of the bear  market the commodities market does not confirm   that the bond market does not confirm that the  forex market does not confirm that the fundamental   outlook does not confirm that especially as core  pce is still rising and the fed itself is saying   more rate hikes are on the way and when we combine  all of the technicals together we could even be   able to pinpoint potentially alongside how monthly  candles are printed the next big risk off moves in   markets if we blow through the 1845 in the vix to  the downside if we blow through all of the levels   highlighted in this video to the upside yes we  will have to look at this and say you know what   perhaps this recent move to the upside has legs  and perhaps the risk of a market capitulation has   receded i do not think that's the case as it  currently stands so as always i hope you enjoyed   this video and if you did please let me know by  liking sharing and subscribing a big thank to   everybody who does that on a regular basis and a  big thank you to everybody who has subscribed to   the channel so far i want to wish you a fantastic  weekend and i want to wish you all the best in   your trading next week the only thing left to  say is take care and don't forget to trade safely

2022-08-01 07:41

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