Weekly Forex Forecast (02/05/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

hey traders john fortune here with this week's  weekly forex forecast i hope you're having a great   weekend next week is a big week for the markets we  have three interest rate decisions next week plus   non-farm payrolls i tweeted last week about the  major major breakout in the dollar index to the   upside a new trend potentially forming here this  is not click bait this is not alarmism this is   really happening and we're going to look at that  more in today's video and what's important is we   also have fomc on wednesday which is the key event  for next week and all of the markets across the   board are likely to be waiting until this event  takes place before finding direction so as usual   i'm going to go through my trading plan with you  and we're going to look at the best setups for   next week but with so much going on next week in  terms of economic data and events the number one   priority next week is keeping your capital intact  so quick look at the economic calendar before   we move to the charts you can see the french  presidential election didn't really have much   of an effect on the market so we can skip this  it's not something we need to pay attention to   what was important last week were two things  one was the boj which came out and reaffirmed   that it's going to continue to buy bonds we  discussed the bond purchasing program in last   week's video for those of you who didn't see  that might be worth going back and watching that   but they are going to continue to buy bonds in  an unlimited quantity and this is fundamentally   applying downward pressure still to the yen and  we also have u.s advanced gdp which came out   at minus 1.4 for the quarter don't forget a  recession a technical recession is defined as two   consecutive quarters of negative gdp so  another three months of that or another quarter   and you have a technical recession in the us  now we're having a quick look at that here   because when we go through the charts and  we talk about fomc on wednesday it's just   something to bear in mind if we have a look at  the economic calendar for the coming week however   you can see we have an interest rate decision out  of australia on tuesday we have an interest rate   decision out of the us on wednesday and we have an  interest rate decision out of the uk on thursday   and on friday we have non-farm payrolls so as you  can see there's a lot going on next week and this   is why my priority next week is to preserve  my capital that doesn't mean i'm not going to   be trading but it means i'm going to be taking  less risk and certainly i would imagine most of   my trades will come from wednesday onwards next  week after fomc there may be some opportunities   to position into dollar pairs before fomc if you  have the risk tolerance for that but eight times   out of ten i like to wait for the interest rate  decisions to pass before i trade those currencies   and so those are the key things to look out  for next week we also have some bank holidays   on monday and tuesday which again just feeds  into the idea that we're probably going to   see the markets doing nothing between monday and  wednesday and then or correcting and then moving   from wednesday onwards so if we have a look at  the scorecards for the coming week you can see   in last week's video i highlighted the us dollar  as the best play and i said to you guys that   i think this is where the money is going to be  most easily made in the us dollar to the upside   and we looked at those setups in last week's video  the week before that we looked at the swiss franc   i said the same thing the swiss franc looks set to  actually have a big move and we had a really big   sell-off in the swiss franc and coming into this  week it's really the us dollar holding up as the   best currency once again and you can see from last  week we've had a strengthening of the us dollar   and we've also seen a relative strengthening  of the canadian dollar those were the two longs   we're looking at us dollar cad although if you  remember from last week's video the cad itself   was actually fairly weak it's just relatively  strong compared to the other currencies because of   the current price of crude oil and so once again  going into this week my top two long positions are   going to be us dollar and the canadian dollar  the australian dollar is still at plus one   which is bullish to neutral but don't forget  this came off overbought levels of plus four   so the direction of the aussie is actually to the  downside so i wouldn't be surprised to see the   australian dollar continue it was at the top of  the leaderboard and it started to move from left   to right i wouldn't be surprised to see this now  moving further to the right why because as the dxy   strengthens you're going to see the australian  dollar suffering the most generally speaking   and so i would say in the coming weeks we're  likely to see the australian dollar slip further   down the scorecards going into this week the two  weakest currencies are pound and yen and pound was   one of the best shorts from last week we  actually weakened and we looked at the   pound shorts in last week's video but the final  thing to note is that although the japanese yen   is one of the weakest currencies it's actually  coming off of oversold levels and again just like   the australian dollar is moving from left to right  this is somewhat moving from right to left so it's   not just where the scores are now it's where  they're coming from which is important as well   and for that reason i actually prefer new zealand  shorts over japanese yen shorts this week because   you can see the new zealand is weakening even  though it scores slightly higher it's actually   moving from left to right as is the australian  dollar and also the euro the euro is also moving   from left to right even though it only scores  minus one so the pairs that i'm going to be most   focused on next week are number one priority the  us dollar and we're going to be looking at the   fomc meeting on wednesday for direction not  just in the dollar as i said you're likely   to see it give direction to all the markets and  that of course is because of the us dollars role   as the global reserve currency after dollar  strength plays i'm going to be looking at   canadian dollar strength plays and to the downside  as i said primarily i'm focused on the pound and   the new zealand euro and also somewhat the aussie  although because it's still bullish to neutral i   don't favor aussie shorts as one of my best or  favorite opportunities just yet and so the real   three currencies i'm looking at short in this week  are pound new zealand and euro so when we go and   have a look at the charts we can look primarily  towards pound dollar to the downside we can look   at new zealand dollar to the downside euro dollar  to the downside i'm going to be looking at and   somewhat aussie dollar to the downside although  not as much as these three currencies over here   we're also in today's video going to be looking  at poundcad to the downside which i like we're   going to be looking once again at new zealand cad  and a number of these are opportunities we looked   at in last week's video that worked really well so  essentially i'm looking for these plays again and   for the continuation of the setups we looked at  and i hope many of you profited from last week and   finally again we can look at aussie cad but it's  not going to be one of my best pairs next week but   you can put it on the table and keep an eye on it  just in case we see a real weakening of the aussie   next week okay so let's start with the us dollar  index first and foremost we took out both targets   to the upside last week and as you can see i've  drawn on the 102 here in gold why because this   is the major breakout point in the dxy which i  covered in the thread which i wrote on twitter   again you can click on the link in the description  below if you want to read that thread and i've   also put the link in the comment the pin comment  to this video but if we scroll out a little bit   here in the dxy you can see the basis of this  is that this failure to make a low down here and the re-break of the 102.992 is how major  trends start that is how they start a lot of  

you would describe this as a wave 2 and this  would be the beginning of a wave 3. personally   i'm not big on elliot wave but if that kind of  description helps you to understand what we're   looking at here in terms of a new trend being  born then that's the way you might want to think   of it and in the twitter thread i look at yearly  charts monthly charts and i cover multi-year even   multi-decade consolidations which are breaking in  that thread and what's really fascinating about   this breakout to the upside is when do you get  generally speaking a continuation and new trends   being born when you get this kind of setup  you get it when you have a major fundamental   catalyst and very often on much smaller charts you  will get that from an interest rate decision and   of course we have an interest rate decision next  wednesday now one scenario i see a path to which   can send the dxy through the 102.99 and therefore  kickstart a major trend to the upside is an   unexpected rate hike of 75 basis points next week  the market expects the fed to raise by 50. however  

the fed really has to get a handle on  inflation it has to do it pretty quickly   and it cannot raise rates to 20 like it did during  the volca era because of the interest repayments   that would be required on u.s debt the u.s debt  is too high so they almost don't have that tall   in their toolbox they can't raise rates to 20  now but what they can do in order to try and gain   some ground from being behind the curve because  they are very very far behind the curve in fact   normally you need to raise interest rates above  the generally above the rate of inflation you   could say that's just a very basic definition of  what's required to control inflation however if   they're unable to do that what they can do is they  can raise rates quicker than expected and they can   cause an impact on aggregate demand by doing  that because when you raise rates in a steady   premeditated way and the market knows how rate  hikes are going to take place when and where   it actually has less of an effect and conversely  if you unexpectedly hike it has more of an effect   so although the fed can't raise rates very high it  can raise them quicker than expected and that is   a tool it still has in its toolbox and it may  be one of the only ways it can get aggressive   is by putting out unexpected rate hikes because  as i said they don't have the ability to put very   high levels of interest rates out there so that's  one scenario which i would absolutely look out   for next week and i think there's a real chance  that could actually take place and that sends the   dxy higher and when everybody is expecting exactly  what happened last time to take place on wednesday   which is that the dollar rallied the fed came out  aggressive and hawkish stocks were selling off   and then on the actual event itself stocks rallied  and the dollar sold off everybody seems to be   anticipating that happening again but i question  whether we'll get that unexpected rate hike and   fuel to actually propel the dxy further to the  upside next week again it's very tough to say what   the fed's going to do in advance but just keep an  eye out and bear that scenario in mind next week   so the next target to the upside is the 104.92  and it'll be interesting to see whether we can   hold above this major breakout level of the 102.99  next week in the dollar index next is the euro we   took out both targets to the downside and we're  looking really at the inverse here of the dxy   in the euro the 1.06710 is the major breakout  level to the downside and where you would expect   a new trend to start and we came through here  with momentum that's usually the first sign   that the breakout is successful so it does look to  me especially if we get an unexpected rate height   next week does look to me like this is going to  continue to the downside i wouldn't be surprised   to see this market pulling back between monday and  wednesday just as the dollar is probably going to   pull back and correct or consolidate above that  breakout level between monday and wednesday and   then further declines to the downside after fomc  on wednesday it's important to note that if we get   the opposite happen and the market rallies on fomc  it may be difficult to trade the us dollar pairs   next week because they're right at the top of a  big move to the upside in the dxy so you really   want to see a continuation of that trend from the  fed meeting to get the best opportunities out of   the dollar players next week next is the pound we  took out both targets to the downside last week   this was a really good short highlighted in last  week's video coming into this week any pullback   in this market preferably between monday and  wednesday is going to be the opportunity to look   for bearish reversals so we get fomc and we break  down like this that's going to be your opportunity   to look for any short entries into the 1.23 50. of  course not be looking to trade the pound futures  

themselves necessarily speaking but that scenario  would play out with pound dollar to the downside   which we're going to look at in a bit next is the  swiss franc next is the swiss franc now you don't   need to really even be in the markets for very  long to know this is bearish i mean this thing   is just straight down just like the euro just like  the pound etc we did take out all three targets   and we finished the week right at the target going  into this week i would expect to see a correction   in the swiss franc before further declines to the  downside and if i was going to be trading swiss   franc pairs i would be looking to be short the  swiss franc this is also in line with the s b they   want to see the swiss rank devalued so really the  bias is weighted to the downside in swiss franc   next is the japanese yen now the japanese  yen also broke a major breakout level of 0.00   if we zoom out here in the daily chart you  can see for yourself the breakout here that   is a major major breakout and you can see  it's actually a head and shoulders breakout   and this has massive ramifications for the  japanese yen but also the dollar because if   we continue to see the us dollar or rather if we  see the japanese yen selling off you're going to   see that money flowing somewhere and it's  flowing into the us dollar so the continued   policy from the boj of buying an unlimited amount  of bonds is actually sending capital flowing into   the dollar as well it's another reason why i  think this breakout in the dollar to the upside   has some legs i am still bearish on the yen  you can see it might be running out of legs   here any pullback though is still viewed as an  opportunity especially a retest of this level   to start to look for a sell-off down towards  0.00759 next is the cad now the cad in and   of itself is weak and that's where when we  look at the currencies down here yes i do   like pound cad i like new zealand cad but the  cad itself is not a great long it's just a good   buy relative to some of these other currencies  and especially the new zealand and the pound so   i wouldn't go too crazy on cad long positions  because if you compare what we're seeing here   to what we're looking at in the dollar the dollar  is clearly a good buy whereas the cad is just   not as bad as short as the other currencies hence  why poundcad to the downside new zealand cats are   the downside we're going to look at aussie dollar  we took out the target at the 0.7171 and again you   can see this is really quite a bearish chart  it is kind of bullish to neutral on a relative   basis however i wouldn't be surprised to see this  correcting and making its way down to the 0.6994  

so i am prepared to look at aussie dollar to  the downside we can also look at aussie cad   but certainly i prefer aussie dollar because the  dollar is the strongest currency and last but not   least we have the new zealand dollar we took out  the target at the 0.6528 and the break of this low   is what is a continuation of the overall downtrend  so any pullback in this market i am looking for   moves down to the 0.62410 and when you zoom out  here on the new zealand i mean there is nothing   but air between where we currently sit and  the 0.624 we could be coming down here quite   quickly and for that reason i do like new  zealand shorts going into next week as well   so let's move on to the markets themselves but  just very quickly we need to look at the stock   market i highlighted this in last week's video  we're approaching a major structural failure   right at this level here the four one one four  point six five i did call back on this day in fact   that i believe the u.s stock market was going to  crash we have essentially started to crash since   then and if we take out before 114.65 next week  don't be surprised to see real capitulation to the  

downside because for those again for those of you  who read the thread on the dxy it's exactly the   same breakout mechanics that are likely to take  place here in the stock market those who are long   down here who bought the dip they have stop losses  over here the reason we're starting to crash in   this area is because a number of these people who  are already long in this area are covering their   long positions it's causing acceleration to the  downside new trade is added shorts this makes it   go even faster and there are going to be some  traders down here who refuse to accept a loss   say they bought instead of down here in fact say  they bought up here and the market's here they   don't want to accept this as a loss so they've got  stop losses down here and when they get taken out   you're going to have more long covering on a  break below the 4114.65 and you're gonna have new   traders adding short positions on the breakout so  you could see a very strong selloff on the 4114.65   and it's interesting that we are approaching a  major breakdown in stocks right as the federal   meeting next wednesday and i think if the fed gets  this wrong on wednesday you could be seeing some   real problems in the stock market now again i just  remind you what happened last time the fed met   the market was selling off and then on a  very hawkish fed the market started to rally   it didn't actually get very far you can see it  topped out over here but in terms of the forex   markets if we break the 4114.65 you're likely  going to see a big sell-off a flight safety and  

this would normally be benefiting the japanese yen  and the dollar but because of what's going on in   the yen it really is leaving one man standing  i mean even the swiss franc is being devalued   by the swiss national bank it's really only the  us dollar which has a safe haven status when you   see market stock markets crashing or selling off  hard and at the same time out of the three swiss   franc japanese yen and the us dollar the us dollar  is the only one where the central bank is engaged   in a tight in cycle and this is why i'm  prioritizing over and above everything else   dollar strength so keep an eye out for the 4114.65  next week and if you want a little bit more info   on this you can look at last week's video where i  covered the nasdaq the russell and the dow jones   a little bit more as well and highlighted their  major breakout levels to the downside last week   okay so starting with crude oil and crude oil is  still bullish i am looking overall for a target   of the 113.88 the problem i have with crude oil  is although it is currently at a price of 104   primarily based on the supply side if the u.s goes  into recession this is going to have an effect on   the demand side you are going to see crude oil  coming down especially if there's a market crash   crude oil is going to get whacked so i'm not  massively bullish on crude oil but on balance   i am bullish and i certainly would be looking at  this as being supportive of the canadian dollar   and it just feeds in instead of trading  crude oil to the upside personally speaking   i would rather reflect this outlook on crude  oil in a long canadian dollar position versus   the pound versus the new zealand as opposed  to being long crude oil itself if you want   to trade crude oil to the upside that's what i'd  be looking for but i personally would prefer to   leave crude oil longs because of my strong bias on  the dollar and its potential deflationary effects   next is GBPUSD now i believe last week this was  actually my number one trade or set up to the   downside we took out both targets and then some  last week in this market so really nice short   from last week going into this week i am looking  for the declines and as it currently stands what   i'd like to see is a pullback between monday  and wednesday and any breakdown from wednesday   like this is going to be the opportunity  to start to look for shorts once again   into the one point two three four three next is  NZDUSD also a short from last week we took out   the target set at 0.65 390. any pullback in this  market preferably between monday and wednesday   will be the opportunity to start to look for a  break to the downside especially on fomc and any   breakdown is going to be viewed as an opportunity  to look for shorts into the 0.6384 next is EURUSD  

highlighted as a good short opportunity last week  this was one of my high conviction setups we took   out both targets and we broke the 1.06359 which  was the major breakout level which EURUSD starts   a new trend to the downside we broke this with  momentum so you already have indication number one   that this is going to be potentially a successful  breakout what comes out of the fed on wednesday   could very well in my opinion propel this further  to the downside so we took out both targets last   week going into this week what i would like to see  is any pullback and between monday and wednesday   i'd like to see this pulling back re-testing  the major breakout level and just consolidating   that would set up a really nice opportunity on  wednesday if the fed comes out and we see this   breakdown like this that's the opportunity to look  for any pullback near term and i'm going to be   looking for shorts into the 1.0341 next is AUDUSD  highlighted last week we took out the 0.71580   as we start to transition between stagflation  where the australian dollar was outperforming   alongside the us dollar into a more deflationary  scenario we are seeing aussie rolling over to   the downside and i tweeted this out a while ago  we're going to see stagflation turn into deflation   and the fact that the aussie is now starting to  underperform the dollar is a sign from the forex   markets that we are transitioning from stagflation  into deflation so any pullback in this market and   preferably i'd like to see this correcting between  monday and wednesday and then on fomc breaking   down like this with a sharp sell-off any small  pullback here would be the opportunity to look   for shorts into the 0.6988 and those four markets  there are my key fomc trades that i'm going to be  

looking at next week next is USDCHF highlighted as  a good trade to the upside last week and we had a   really nice move up took out the target and almost  got towards target two going into this week any   pullback in this market is still once again viewed  as an opportunity to look for long positions   into the 0.9790 just as with last week it's  not highlighted as one of my favorite plays   because both the us dollar and the swiss franc  are a flight safety play and so you do have   potentially lesser moves to the upside in USDCHF  as you would to the downside in AUDUSD EURUSD   NZDUSD GBPUSD and the last dollar pair we're going  to look at is dollar yen again i am bullish on   dollar yen because i'm bullish on the dollar i'm  bearish on the yen we might see a little bit more   of a correction in USDJPY before we continue to  the upside having said that fomc next week is   likely to play the pivotal role in this pair  next anyway we took out both targets to the   upside last week any pull back into fomc and it  looks like we're forming a nice ball flag here as   it currently stands is going to be viewed as the  opportunity to look for a bullish breakout on fomc   i'm going to be looking up towards the 132.15  next is GBPCAD, GBPCAD was a short that we were   looking at last week and look at this selloff  right into the target at 1.59630 and that was   pretty much the low of the week we bounced as it  stands this is just simply viewed as a correction   and any continued pullback is simply going to be  an opportunity to look for another brake lower   and if we can get this kind of a setup i'm going  to be looking further declines into the 1.5875   another market where we took out both targets  to the downside i am still bearish on NZDCAD not   because i'm particularly bullish on the cad but  because the canadian dollar is set to outperform   the new zealand dollar in the scoring system and  so any pullback in this market is simply viewed   as a correction perhaps we test the previous low  and then i'm going to be looking for a break lower   and moves down towards 0.8238 next is AUDCAD not  highlighted in gold as one of my favorite plays  

next week because of the aussie still being kind  of bullish to each one scorecards that may change   in the next couple of weeks we could actually see  the aussie becoming one of the weakest currencies   if the dollar continues its rally any pullback in  this market is viewed as an opportunity to look   for bearish breakouts i'm going to be looking down  towards 0.8977 and the final forex pair here we're   looking at is CADJPY we took out all three targets  to the upside and we finished the week right at   the target any continued pullback in this market  is just going to be treated as a big ball flag   and any break higher is going to be viewed as a  potential opportunity to look for longs into the   103.45 finish up with gold silver and bitcoin  first of all look at the gold silver ratio the   gold silver ratio is breaking out to the upside  and approaching the 85.45 so really you can think   about this i'm long gold short silver vis-a-vis  one another first up is XAUUSD i am bearish on   XAUUSD however i'd prefer short XAGUSD why because  we just discussed with the gold silver ratio   breaking out to the upside any pullback in XAUUSD  is currently viewed as an opportunity to look for   bearish reversals into the 1865.64 next is silver  last week i highlighted this in gold as one of the   best plays and i am highlighting it once again  in XAUUSD as one of my favorite setups we took   out boat targets to the downside big sell-off  last week going into this week any pullback in   this market is viewed as an opportunity to look  for bearish reversals down to the 22.52 and again   i prefer to short this over XAUUSD next is XAGUSD  versus euro now this is an interesting market and   i've highlighted this in blue because if for  whatever reason we get a weakening of the dxy   on fomc and we see the euro strengthening this  allows us a bit of a plan b because a stronger   euro against a weak XAGUSD would provide the  opportunity to look for further declines to the   downside in XAGUSD versus euro so if you get like  we had on last fomc the dollar selling off and the   euro strengthening you can look for any pullback  in this market for an opportunity to look for   bearish breakouts and then i'm going to be looking  down towards the next key of support at the 21.20  

and last but not least is bitcoin we came down and  took out the longer term target here at the three   eight zero zero three point zero zero almost to  the pip i am still bearish on bitcoin especially   with a stronger dollar this is going to weigh  to the downside with stock selling off as well   and bitcoin's correlation to the stock market any  pullback in bitcoin is simply viewed at the moment   as an opportunity to look for bearish reversals  down to the next gear of support the 34 410   so that is it for me for this week guys 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 you

2022-05-02 00:14

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