Weekly Forex Forecast (09/05/22) EurUsd / XauUsd + Forex Trading Plan! [HD]
hey traders it's john fortune here with this week's weekly forex forecast hope you're having a fantastic weekend we're going to go through the process that we normally go through in today's video last week was a fantastic week we had fomc as well on the wednesday and the markets really just corrected and then started to move from fomc and i did state in last week's video that that was most likely to be the case and as you can see we came down below the major breakout level highlighted previously and also in the thread that i posted on twitter with the major dxy breakout at the 102 992 and that was purely on the basis of the fed taking off the table the 0.75 rate hike however markets quickly realize this is not super dovish because the fed are still hiking into an economic slowdown we've already seen the contraction in gdp for q1 of this year and as a result we saw the dxy snapping back above the major breakout level of the 102.992 and we close the week up in this area so if we have a quick look at the economic calendar and we just skimmed through what we had last week in terms of economic data because it was quite a bit going on we did have an interest rate decision out to australia where they raised interest rates very slightly was fairly hawkish however this is not a significant increase in interest rates the next key thing to pay attention to from last week was fomc on wednesday we had the hike of 0.5
however we saw that initial dip as the fed took 0.75 off the table again this is not dovish this is actually bullish and when you add this hike cycle to the recent contraction in gdp this is why we're seeing the dollar climb even higher since fomc we also had an interest rate decision out of the uk where they raised rates up to 1 from 0.75 and we saw the pound actually sell off quite hard and one of the primary reasons for this was that the bank of england forecast a potential recession in the uk and of course if there's going to be a recession markets are forwards looking so they're selling the pound because they're looking at interest rates having to go down which of course is bearish for the pound and finally we had non-farm payrolls on friday we did have a beat but with everything going on in the rest of the week with fmc especially this is really nothing we need to pay attention to per se in terms of short-term trading if we jump ahead to what's coming up this week you can see we have a pretty clear calendar the main thing and the only thing we really need to pay attention to is the cpi data out of the us on wednesday generally speaking this has not historically been a massive event because inflation has been pretty stable but as inflation has picked up this event has become more and more important so again just like with fomc last week if you see the dollar index kind of not doing much monday tuesday into wednesday it may be getting ready to move on the cpi print so just be aware of that heading into next week but apart from that we have a pretty clear run and a pretty clear economic calendar in terms of major events next week okay so if we look at the scorecards heading into this week there's a few key things to take note of first and foremost is that the us dollar is still currently scored as the best long on a one-month forward-looking basis the pound is still the best short going into next week and also on top of that we actually have the pound weakening from minus two to minus three this is really the best signal you can get when you have a weak currency which is becoming even weaker that is your best short signal so absolutely i'm going to be focused on pound shorts once again as an absolute priority next week i am going to be focused on usd long positions but because the pound is also weak and weakening i actually like pound shorts as a place to make money next week over and above even us dollar long positions so pound shorts are my number one theme heading into next week that i'm going to pay attention to the second thing to note is the euro has actually strengthened from last week minus one and it now sits at one so this is kind of going from bearish to neutral to bullish to neutral but it's still kind of neutral but why this is important is because whenever you see the us dollar and the euro scoring either both strong or both weak it tends to suggest markets are getting a little bit corrective and especially if they've had long runs which we've seen in the dxy and in markets in general it's a sign that the markets may start to become a little bit less volatile may go into a slight contraction or consolidation and generally speaking this is a good sign to actually take fewer trades perhaps and look only for the best trades because it's a sign that the overall market condition may be turning less volatile and when that happens you tend to have less trading opportunities so the best way to think about this is like a sign curve like this and one of the most overlooked aspects of trading is when to allocate capital take more risk when to allocate less capital take less risk and when the market is more volatile you have more trading opportunities so for example the market is more volatile you have more opportunities and therefore it's a good time to allocate more risk and when the market becomes less volatile over here and there are less trading opportunities this is when markets can get more choppy overall and this is when it's a better time to actually take less risk and what happens is a lot of traders they completely overlook this and they just try to trade and allocate capital the same way every day or every week or all the time essentially whereas really it should be a process of trading more because market conditions are good and then trading a little bit less because market conditions are not as good and then when they start to pick up you can trade a little bit more and of course what happens in reality is that traders or new traders especially will end up on the wrong side of this because when they get really good market opportunities they have either made money and so they want to make more money and very often let's say they traded this and they've made really good money well now up in this area just as opportunities are about to dwindle or contract they get perhaps greedy and they actually start to trade twice as much because they've made more money and they just end up giving all their profits back as opportunities roll over or even worse what will happen is traders will be scared because down in this area they've traded and they've taken losses and the market opportunities come back in and they kind of sit on the sidelines and they watch and they say wow trading conditions are fantastic and then right up in this area as they've sat all this out they start to allocate capital and the market rolls over and they feel like they're always on the wrong side of trades and it's partly because of this so when you see the euro and when you see the dollar both strong or both weak you tend to be sort of around this but it's a sign we could be either peaking or troughing and of course because we've had fantastic moves it's a sign we may be over here so just in case we're about to see the markets contract and opportunities kind of present themselves less often over the next couple of weeks that is why i'll be taking a little bit less risk and looking only for the best trades until we start to see the us dollar and the euro at opposite ends of the scorecards because that will be telling us that once again we're moving into a point where market conditions are providing more opportunities okay so let's have a look at the individual currencies and we're on the daily chart as always because we want to just get an overall view a big picture of what's going on here and in the dxy you can see we have broken out of the 102.992 i mentioned in the twitter thread and previous videos this is a major multi-year breakout it's a seven year consolidation breakout and we closed the week above this level with the appearance of the euro in the positive end of the scorecards maybe i mean this would make sense technically we start to see a little bit of a consolidation in the dollar index around this level you very often get that with major breakouts because you have disagreements you have traders trying to sell them and you have some traders trying to buy the breakout and as a result market can kind of consolidate or just chop now the important thing to note and you'll see when we go through the rest of the currencies is the dollar is the only outright technically bullish currency and i am still bullish on the dollar so i'm still going to be focused on dollar long positions next week next is the euro now the euro is a little bit of an indication of what we may see in the dollar because it's essentially the inverse of the dxy and the euro unlike the dollar which kind of dipped back below its breakout level this has not even come back to test the major multi-year breakout at the 1.06710 so it tells me that these breakouts are at least the time being technically holding and again perhaps seeing the euro and the dollar both at the positive end of the scorecard is just an indication that we're going to come back and re-test this level for example and consolidate before continuing and in this case down to the 1.0376 so i am bearish on the euro but the scorecards may be indicating
a near-term consolidation perhaps for a few days or maybe even a week we will see and for that reason euro is not one of my best pairs next week but i am still looking for shorts especially as the euro remains below is 1.06710 major multi-year breakout level next is the pound now last week we came and took out the target set at the 1.2350 we are quite close to the next target maybe we take this target out first if we do then any pullback will be viewed as an opportunity to look for shorts into the 1.2081 not necessarily going to be trading pound futures but
this of course will be bearish for the pound pairs next is the swiss franc we took out both targets to the downside and finished the week right at the second target i am still bearish on the swiss franc and you can see we have some strong momentum to the downside so any corrections in the swiss franc are as it currently stands viewed as an opportunity to look for short positions in the swiss franc this is also in line with the snb policy of devaluation so we have the wind of the swiss central bank in our sales with any shorts and they are usually always the best trades next is the japanese yen i highlighted in previous videos the major multi-year breakout of the four 0.007945 we broke through and we haven't even come back and retested this this thing is just continuing to the downside i explained also in previous videos why this is taking place because of the interventions in the japanese bond market by the boj and as it stands i'm still bearish on the japanese yen next is the canadian dollar we actually took out the target to the downside at 0.7754 and the interesting thing about the cad is you can see technically this is a bearish currency however because of the price of crude oil which is rising it has been supported and retained some relative strength vis-a-vis the other currencies when i put all of the macro data into the scoring system the canadian dollar scores relatively better than the other currencies this is why you see it scoring plus two and as we can see from last week although the canadian dollar itself sold off we still had some profitable trades we identified such as new zealand cats such as poundcad so once again the cad itself is not particularly bullish and i much prefer us dollar long positions but i will also consider cad strength plays head into next week especially pound cad and new zealand cad which once again highlighted as two of my favorite pairs next week next is the australian dollar we had a bit of a rally and then we had a rate hike out of australia and this hasn't really changed the outlook for the australian dollar because we're in a kind of stagflationary scenario still it has been benefiting however you can see this has been waning and the aussie has been losing some strength recently so overall bearish but kind of bearish to neutral technically speaking on the aussie and of course in the scorecards we are kind of neutral as well bullish to neutral and finally the new zealand dollar the new zealand dollar is bearish it's kind of bearish to neutral in the scorecards but i do like the new zealand dollar for further declines and as you can see it's going to be one of the things i'm going to be focused on next week primarily in the form of new zealand and new zealand cad which we're going to look at now okay so let's have a look at the markets themselves where are the best setups heading into next week starting with crude oil crude oil is making its way towards the target set in previous videos at the 113-888 any pullback in this market is viewed as an opportunity to look for bullish setups into as i said the 113.8 and i do believe this target is now going to be taken out possibly next week i would say even probably next week and if we start to break through here going to be looking up to the 118.20 this is also important not just in love itself but in the canadian pairs we're going to be looking at and also a bonus chart which i'm absolutely going to be focused on next week i think is going to be potentially a fantastic place to make money that is pound mex and we're going to be looking at that in today's video as well next is pound dollar now pound dollar was my favorite short last week and we had a really nice sell-off over two percent peter trough and closed at this target set from last week almost to the point at the 423 going into this week i am focused on pound shorts this is one of my favorite if not my favorite setup i think pound mex may actually be my favorite setup heading into next week but outside of the bonus chart of powermax we're going to look at pound dollar is my favorite chart going into next week we have broken out of this what i'd like to see next week is i'd like to see a pullback possibly even a retest of this area over here and any pullback is simply going to be viewed as another opportunity to look for shorts into the one point two two five two after right through here on to the one point two oh eight ten so pound dollar shorts are at the top of my list to keep an eye on four entries next week next is new zealand now new zealand dollar was also a fantastic short last week again highlighted in last week's video as one of the best pairs to look at this pool back here was nothing more than an opportunity as we had pre-planned to short this market into the target we came just short of the target so anybody short from last week i would be looking for this target to be now taken out for anybody not already involved from last week any pullback in this area is a second opportunity to look for shorts into the 0.6384 but if i think which is most likely going to happen if we come down and we take out this target first and then we bounce and start to pull back i'm going to be looking for shorts into the next care of support to the downside 0.6240 next is us dollar japanese yen we are completing in fact we're just starting
to break out of a ball flag here and i do like this market to the upside the only reason it's not highlighted in gold is purely because if you remember from previous videos the japanese gem was oversold and it's moving from right to left on the scorecards it's actually strengthening a little bit even though the yen is over a week so i do like us dollar yen to the upside don't get me wrong i certainly think any pullback is going to be viewed as an opportunity or should be views an opportunity to look for long positions first into the previous highs but then on to the 132.15 so i am going to be looking for setups in this market but i'm going to prioritize pound dollar and new zealand dollar if i get some positions in pound or new zealand dollar i might leave us dollar yen however that is the setup i'm looking for in this market now us dollar swiss franc similar to us yen it could it's very close to being on my favorite list but i just don't like these markets as much as i like the top two here so i am bullish on us dollar swiss franc very similar to new zealand dollar i believe it was when we come this close to the target what we want to really see is the market taking out the target first because there's not much risk to reward here the trade was from down in this area on the pullback last week when we're looking at this market so i'd like to see this market take out the 0.9898 first if it does that and starts to pull back i'm going to be treating this as simply another opportunity to look for bullish setups or bullish breakouts into the 0.9959 next is euro dollar now look at euro dollar to the downside
again to be honest with you this probably could be on my favorite list outside of the other markets here euro dollar to the downside is the one market you could probably put up here and i would say it's my third favorite even i've listed these slightly higher the reason is because we've pulled back and retested the major multi-year breakout in euro dollar and look at that retest of the 1.06359 we have now started to make head and shoulders and i would not be surprised to see this market start to break down from the levels we're already at so going into next week i am absolutely going to be focused on shorts in this market down to the next kiev supporter the 1.0341 if there's one other market you could add in to the favorites list next week it would be this one and in fact the only reason it doesn't make the list is because of that plus one in the scoring system so definitely going to be looking for shorts but it just misses out on the favorites list because of that plus one score in the macro scoring system and the last dollar pair we're going to look at is aussie dollar my least favorite out of all of these however i am still bearish so any pullback in this market would be viewed as an opportunity to look for bearish reversals into the 0.6988 next is poundcad last week we took out the target at the 1.5875 going into this week this is one of my favorite pairs guys keep an eye out for pound cad to reach its target 1.5737 i think this is one of the highest probability setups heading into next week
and i would put the ability for this market to reach its target the 1.5737 over 85 percent i genuinely think this is going to be a place to make money next week so keep an eye on pound cad any continued pullback is simply viewed as an opportunity to look for shorts once again into the 1.5737 keep an eye on pound cad next week next is new zealand cad we took out the target set in last week's video this was one of the best setups highlighted in last week's video and we took out target 0.8238 coming into this week this is a very interesting market because the next key area of support is down at 0.80 160. this could potentially come down to here very quickly the reason i've added in a minor target here at the 0.8150 is because it may not do this all in one week so going into next week the target i'm going to be looking at although it's a minor target and i am looking for the 0.80 160 overall any pullback in this market is going to be viewed as
an opportunity to look for bearish reversals into the 0.8150 and the final cad pair we're looking at here is cad yen again not highlight is one of my favorite because the japanese yen is moving this way across the scorecards it's strengthening somewhat even though it's clearly bearish and you can see that reflected in the price action last week this market was kind of choppy whereas we've got good sell-offs in pound cad new zealand cad so any continued pullback is still viewed as an opportunity to look for potential long positions and breakouts to the upside into the 103.45 and if you want a conservative target i'd be looking for the previous high over here in cadyan the next market is pound mex now i think this is a really good market heading into next week we have some strong momentum and what i'd like to see is any pullback in this market is going to be viewed as an opportunity to look for bearish reversals down to the next key of support to the downside to 24.71 the strengthening of crude oil is really a large variable or factor in the recent strength of the mexican peso and pound mex may very well be my favorite short going into next week it's certainly my top three pound shorts which is pound mex pound cad and pound dollar those three pairs there are going to be my main focus for making money in the markets next week and the final forex market we're going to look at here is euro pound now i like euro pound because when we look at the scoring system we see the euro actually bullish to neutral and the reason i've highlighted this in purple is because this is a market we can put on our watch list as a plan b a backup trade or what you may term a synthetic hedge and you can play those markets when you have for example the euro and the dollar both scoring strong or weak because you can say to yourself well what if the us dollar is about to weaken somewhat then pound dollar may just get corrective like this but if that happens then euro pound will rise to the upside because as the dollar weakens and the euro strengthens you will see this rising against the weakest currency so it's not a top priority heading into next week but if for whatever reason the dollar pairs primarily pound dollar new zealand dollar fail to provide any good moves and they just kind of chop around because we see a weakening of the dxy have a look at euro pound and any pullback in this market would be viewed as an opportunity to look for a breakout into the 0.8599 and then on to the 0.8657 so not a main focus of next week but a nice market to have in your back pocket if those
us dollar positions don't really go anywhere or we start to see a weakening of dxy okay so wrapping up with gold silver and bitcoin i have in previous videos been highlighting silver as the best short to the downside and i said silver is a better short than gold and we've seen silver outperforming if you will to the downside vis-a-vis gold now one of the reasons i've been telling you this is because the one-month forward-looking score cards for commodities clearly shows silver as a much better short than gold gold is more or less neutral whereas silver is actually scoring pretty weak and this is why silver has been a much better short recently than gold and as it currently stands this looks still to be the case now last week in gold we took out the target set at the one eight 1.865.64 with a strong dollar scoring in the forex scorecards and gold scoring is currently neutral in the commodity scorecards i do favor further downside in gold but it is once again not my preference my preference if you're going short gold or silver would be short silver so any pullback in gold is still viewed as an opportunity to look for bearish reversals although it's not one of my best trades or best setups heading into next week and any breakdown is going to be viewed as an opportunity to look further declines into the 1814.94 next to silver we took out the target set to the downside at 22.52 this was highlighted as a good short last week going into this week this is highlighted again as one of my favorite setups to the downside we're quite close to the target so any pullback in this market is viewed as an opportunity to look for bearish setups into the 22.02 and if we come down and take out the target first and then bounce i'm going to be looking for shorts into the next care of support to the downside at the 21.45 next
is silver versus the euro we took out the previous target set at the 2120. now very much like euro pound i've put this in purple because although i favor silver vis-a-vis the dollar to the short side if we get the dxy weakening or consolidating and we see the euro relatively strengthening maybe the euro comes back to re-test the major breakout level we looked at earlier then you can actually look at silver vis-a-vis the euro very much in the same way as euro pounds as a kind of backup so any pullback in this market would be viewed as an opportunity once again to look for shorts into the 21.88 and last but not least we have bitcoin with stock selling off and with the dollar very very strong recently bitcoin has suffered and we've had a long-term downside target here of the 34-410 bitcoin i'm sorry to say to those of you who are fans of bitcoin it is currently in a bit of trouble and i do see further declines ahead for bitcoin any pullback and this is a classic bear flag set up here any pullback in this market is going to be an opportunity to look for bearish breakouts into the next clear of support which is highlighted in previous videos 34 410 and i think there's a very good chance we go past that onto the 32 935 so that is it from 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
2022-05-10 14:01