Weekly Forex Forecast (13/06/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

Weekly Forex Forecast (13/06/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

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hey traders it's john fortune here with this  week's weekly forex forecast i hope you're   having a fantastic weekend next week is a huge  week for the markets we have fomc on wednesday   and this event combined with the cpi print on  friday paints a bit of a bleak picture for stocks   and it does look like we could have a big risk off  move coming the good news is the scorecards have   set up to allow us to play fomc both ways however  as we go through today's video i'll discuss with   you the reasons why i think we're more likely  to get a big risk off move potentially next week   from fomc okay so let's start with the economic  calendar as we always do and we cannot go into   next week without having a look at the economic  calendar understanding what happened last week   and what's coming up this week we did have  an interest rate decision out of australia   they did give a surprise hike but it's going to  all be about fomc on wednesday you can pretty   much put this in the rear view mirror because  what happens on wednesday next week out of fomc   is really the key to what's going to unfold  in the markets if we scroll down you can   see we also had an interest rate decision out of  europe and although they came out fairly hawkish   at least relative to their previous rhetoric we  saw the euro sell off on the event itself and   that was only compounded by the cpi print which  came out on friday and the reason the cpi print   which came out on friday is extremely important  and in fact i can see they don't have the exact   data on this specific calendar but the print came  out i did tweet it at 8.6 inflation in the u.s and   it was expected to come out as it previously came  out at 8.3 so if it came out previously at 8.3   and it was expected to be 8.3 again essentially  the expectation was that inflation had peaked   however inflation actually increased last week  when we had the cpi print on friday and this   cpi print which came out on friday at 8.6 is the  key to understanding what's most likely going to   happen next week and in fomc on wednesday so if  we just jump ahead to the upcoming week you can   see we have a bit of ppi data some retail sales  data but this is the major event which is likely   to dictate future moves in the markets and we are  expecting a 1.5 interest rate or fed funds rate   target and this would be an increase of 0.5  however with the overshoot in inflation and the  

increasing of inflation last week and the print  on friday of 8.6 there is a risk now that the fed   comes out with a surprise rate hike and instead of  the 0.5 hike which is currently expected we could   see 0.75 some people even calling for a 1 hike  to get inflation under control in the u.s and  

it's because of that we saw a rally in the dollar  at the end of last week and i tweeted previously   even three months ago that the fed is not going to  pivot with eight percent inflation anybody looking   for a fed pivot is going to be disappointed  this is not 2018 and in my opinion on friday   that was when market participants in general  finally realized that this is in fact going to   be the case and far from a fed pivot on wednesday  we're more likely to see at the very least a 0.5   interest rate rise as expected and even possibly  more with an unexpected rate height to control   that inflation so we do also have the smb and we  also have an interest rate decision out of the uk   but as i said it is really fomc next wednesday  which is likely to dictate the markets not just   in forex but also stock markets okay so let's have  a look at the score cards for the coming week and   the great thing about the scorecards this week is  although my base case is for a more hawkish fed   for potentially if we don't get an unexpected  rate hike i think we could still see the fed   even if it just raises the rates by 0.5 as  expected it could come out with more hawkish   rhetoric could decide well we're not going to  unexpectedly raise rates because this could   actually cause problems in the markets what we'll  do is we'll come out with a 0.5 rate hike but we   will jawbone a bit and we'll actually talk more  hawkishly instead of giving a surprise rate hike   so that's a possibility as well either way i think  we're going to see the dollar benefiting from   fomc next week and so dollar strength plays  especially as they're top of the leaderboard here   especially us dollar versus say the pound the  euro new zealand also we can look at swiss franc   potentially us dollar japanese yen those are  going to be my primary setups that i'm going   to be looking for next week after fmc and just  bear in mind the markets are probably going to   do nothing between monday and wednesday probably  just going to correct or chop into fomc so   for reasons discussed when we looked at the  economic calendar i am favoring dollar long   plays next week as my primary setups however what  we can also do here which is great the way this is   structured is if that were to fail to materialize  you would see the australian dollar benefiting   from a weaker dollar more than other currencies  and that would perfectly allow us to set up   a plan b here with say the commodity currencies  of the australian dollar and the canadian dollar   versus especially the safe haven assets like the  swiss franc and the yen so we will also in today's   video not just be looking at ufo long plays which  are my primary setups but we're also going to look   at a backup plan if that fails to materialize  and that backup plan will be for example aussie   frank to the upside aussie yen to the upside  cad frank to the upside cad yen to the upside   and we'll also be looking at a couple of other  setups such as pound cad pandorzi to the downside   as well okay so let's look at the individual  currency starting with the us dollar index   the 102.992 is the major seven year breakout level  which i've highlighted in previous videos and also  

that's what i wrote the twitter thread on with the  dxy breakout i post the link in the description   and i believe in the comment as well pinned to  this video you can find the thread for those of   you who want to read it however we broke back  above the 102.992 last week and we broke above   this with momentum now in previous videos i  had highlighted that we should be treating   this simply as a correction and i said to you this  is not how markets tend to reverse this should be   treated as a correction and the fact we've  broken back above the 102.992 with momentum   as traders took the view which i just outlined  in this video today that inflation has not peaked   inflation is in fact increasing therefore the  fed are going to have to get even more hawkish   than they currently are which is pretty hawkish  and in fact the move to the upside in the dollar   index last week was strong enough really to  be considered this you're seeing some flight   safety here you're seeing money coming into the  dollar on a bit of fear because you can see the   way this just broke up over two days one two  and in those two days we pretty much covered   the majority of the overall down move over here  now the big thing to watch with the dxy next week   is when we take out this high y because we  have a major multi-year seven-year breakout   at the 102.992 and this is essentially  a re-test although it's a deep retest   of this major breakout level and what happens  is when you trade into this you get people   they're not looking at the bigger picture they  short dxy they play stop losses up in this area   and that actually provides fuel for momentums  because all of the people who shorted here   they start to panic especially as it comes back  above the 102.992 you see people pulling stops   here they're the ones that get out early and that  causes momentum to the upside and the rest of them   especially the ones that sold at the low here they  don't want to take the loss on this but they do   have stop losses over here and when this comes up  and takes out the high we could see this breaking   with capitulation to the upside we could see stop  losses coming out we could see short covering and   that is the fuel that is required for bigger  breakouts so we ask ourselves a question well   is the dollar in a position fundamentally where  we could see a much bigger breakout for seven   year consolidation and the answer that is actually  yes there is a catalyst a macro catalyst and that   is that the fed is behind the curve inflation is  actually not peaking it's increasing and the fed   is going to have to get even more aggressive than  people thought in order to get this under control   that is the exact macro drop you might expect  if you were to see a true seven year breakout   in the dxy so keep an eye out for this next week  this is something that i've been keeping you guys   updated on and posted about ever since we broke  the 102.992 frmc next wednesday especially with  

an unexpected rate rise or a more hawkish fed than  expected could be the catalyst to break this seven   year consolidation and we could actually see some  real strength coming into the dxy next week so   i do favor dollar long positions next week next  is the euro now in previous videos i highlighted   the major breakout multi-year breakout for  1.06710 this is essentially the euro version   of that major seven year breakout we saw in the  dxy and unless we can come back above here i   said in previous videos and start trading above  this with momentum this is the start of a major   trend the downside in the euro and in previous  videos we came up and we consolidated above this   and i said to you one of the rules of  trading is you don't buy support in downtrend   and there's likely to be stop losses in this area  the same kind of setup for eurodollar and silver   which we're going to look at and i said when this  breaks down and these people get taken out very   similar in fact pretty much just the opposite of  what i just discussed in the bigger version with   the dxy breakout to the upside we saw kind of a  mini version here of stop losses being running   capitulation coming in there's a very good chance  this now comes down and this failure of the 1.067   could in fact be the start of a much bigger trend  to the downside in europe and if the euro cannot   rally and gain strength from a more hawkish ecb  when you add into the fact the inflation miss on   friday and the fact that the fed in all likelihood  are going to get even more hawkish on wednesday   that is the catalyst for this to fail  them for further declines in the euro   so any pullback in the euro i am looking for the  declines down to the 1.02 960. next is the pound   in previous videos i highlighted the fact we  traded into this resistance level i said i was   looking for declines and we started to break  out so any pullback now in the pound is viewed   as an opportunity to look further declines down  to the 1.2081 and then on to the 1.1734 next is  

the swiss franc now the swiss rank was a market  which had some near-term strength but i did say   to you that this really is just setting up as a  big bear flag and i am expecting this to come down   possibly even to the 0.98690 and for that reason  i didn't trade the swiss franc pairs even though   they were showing a little bit of kind i think it  was bullish to neutral in last week's scorecards   we just left these out altogether the swiss franc  is now declining and this looks like it's set for   further declines next is the yen now previously  i noted we were coming back to try and retest   the major breakout level here however we got a  sign from the scores to start to be short yen   once again a couple of weeks back and it failed to  retest this and it came down the problem with the   yen is if we are approaching a global recession  as i've tweeted about over the last few months   the yen historically catches a bid as a safe  haven asset in that scenario and you could see   this snap back quite violently if we start to  see some capitulation in the stock market so i   am interested in yen shorts but i would prefer to  trade those if we saw the dollar reversing or for   whatever reason we saw a more dovish fed that's  why the yen pairs like aussie yen caddie these   are more of a plan b because my expectation is for  a more hawkish fed not for a more devish fed next   is the canadian dollar this is a market we've been  relatively trading to the upside even though it's   kind of been neutral overall and look at this  sell-off last week out of the canadian dollar   if this comes down continues below 0.77650 this  actually could start a brand new trend to the   downside breaking out of this consolidation and  that would be one of the first signs that we could   be getting close to a capitulation and a crash  in the stock market why as it currently stands   the commodity currencies like the canadian dollar  like the australian dollar like the mexican peso   they've been holding up which is a sign that  inflation or stagflation is still the current   economic condition as opposed to deflation when  you get those market crashes if the commodity   currencies start to roll over that really is the  canary in the coal mine that the stock markets   may be about to crash and based on what we saw  at the end of last week in the canadian dollar   despite the fact we have strong crude oil this is  not a good sign but it is still a little bit early   to make that call yet i would like to see the  canadian dollar breaking down and even taking   out the low over here that would really be the  time when we could see really big problems in the   market and of course in that scenario what happens  to the us dollar exposed to the upside so again   cad pairs to the upside are on my list but they're  a plan b and i won't be trading them if we get a   strong dollar next is the aussie aussie tested  resistance and now we're starting to sell off   again just as i discussed with the canadian dollar  we are now starting to see what was recently a   relatively strong commodity currency starting to  sell off and this may be an early warning sign of   stagflation turning into deflation so again  i am going to be long the australian dollar   because relatively it's one of the strongest  currencies in the scorecards but only if we   see the dxy falling and we get a reversal in the  dxy and so aussie long positions are only a plan   b and finally we have the new zealand dollar big  bear flag i have been looking for this to come   down further declines are now taking place and  new zealand shorts are something i'm interested   in next week especially versus the us dollar if we  get a more hawkish fed okay so let's have a look   at the markets themselves starting with crude  oil now crude oil is still bullish and with   this in place this is most likely signaling we're  going to have stagflation however notice the price   action at the end of last week when we had that  inflation print that sell-off there in crude oil   again it's a little bit early to say i don't  like to pick tops or bottoms as many of you   will know and i would really like to see  crude oil coming down below the 113710 as   another sign that we're turning from stagflation  to deflation as it currently stands i'm bullish on   crude oil although i don't think i'm going to  be trading crude oil next week because of fmc   any pullback in crude oil is going to be viewed  as an opportunity perhaps after fmc to look for   a bullish breakout into the 125.95 next is  EURUSD, EURUSD is my favorite market heading   into next week because it's the currency in  terms of the euro which is most exposed to   the us dollar so if we do get a hawkish fed or  we get a more hawkish fed than expected or even   a surprise rate hike we are going to see the euro  suffering as one of the most against the us dollar   any pullback and what i think we could very well  see is a correction into wednesday perhaps even a   retest and this was a setup i actually discussed  last week i said look for the break below here   stop losses to be taken out and capitulation  look at this that's exactly what we got   so any correction into fmc is going to be viewed  as an opportunity to look further declined into   the 1.0341 next is GBPUSD my second favorite  market which is why it's highlighted in gold   we also had a breakdown at the back of last week  and any pullback in this market i'm looking for   a correction into fmc most likely and i'm going  to be looking further declines into the 1.2081  

and again this is based around that scenario of  the fed coming out and being more aggressive than   people expected because of the miss in inflation  on friday and my third and final favorite heading   into next week and you can see all of my favorite  pairs are dollar plays heading into next week is   NZDUSD this is a commodity currency and the  commodity currencies tend to suffer the most   against the dollar when you have risk-off  moves and so any pullback in this market   is going to be viewed as an opportunity next week  to look further declines into the 0.6158 next is   USDCHF now USDCHF AND USDJPY are not highlighting  gold because these are both risk off currencies so   when you get or if you get a hawkish fed or a more  hawkish fed and you get strength coming into the   dollar it's also going to provide some strength  into other risk off assets and so USDCHF & USDJPY   for those reasons are not viewed as good as euro,  pound, new zealand in the scenario we get an   unexpectedly hawkish fed but i would still expect  USDCHF to rise to the upside so any pullback in   this market is viewed as an opportunity to look  for bullish setups into the 1.0049 next is USDJPY   now first thing to note is that USDJPY took out  targets to the upside and it finished the week at   third target it also took out the previous height  the one three three seven forty the next thing   to note with us dollar yen is if we break the one  three five sixteen there's nothing but air a huge   gap between the 140.290 and you can run these kind  of levels quite quickly when you get that scenario   the problem with the USDJPY is if we get an overly  hawkish fed and we start to see a flight to safety   historically you will see us dollar yen selling  off you see us dollar declining against japanese   yen because the yen has historically been more  of a safe haven asset than the dollar and that   is because of the status of japan as being the  world's largest creditor and so there is a little   bit of a dilemma here with the USDJPY pair this is  a good long all the time the markets are not in a   flight to safety and so i quite like us dollar  yen to the upside the whole time the commodity   currencies are holding their strength if we see  a big rally in the dollar and we see capitulation   taking out the highs in the dollar index  next week because of something the fed says   i would not be looking to trade us dollar yen to  the upside because i'd be worried about going long   a flight safety coming in as the stock  markets in the us for example sell off   and that actually is going to in all likelihood  see the us dollar declining against the end   so i've left this in here so we can discuss that  about the yen however it's my least favorite and   the chances of me trading it next week are very  very slim especially as you're going to get   opportunities in these markets if the fed comes  out and is overly hawkish okay so what about   if that does not materialize and for whatever  reason we see a sell-off in the dollar because   of something the fed says next week although  i think that's unlikely what happens if that   materializes we want to be prepared to be wrong  let's say and to trade this in the other direction   well AUDJPY took out the target last week this has  been a really good long ever since it broke out   of this consolidation down in this area i flagged  this for long opportunities and we had a fantastic   rally coming into this week however if we get  a strong dollar a breakout to the upside nobly   hawkish fed and this causes a sell-off in stocks  we could see a flight safety and that would see   the aussie declining against the YEN that's why  these are plan b currencies in the event of a   dollar weakening and something as well that just  caught my eye here is what is interesting here   is we have this rally up here this inverse  head and shoulders we have a very extended   move up here and this looks very much like a one  two and a three wave for those of you who like   your waves markets do not always move in waves  but they do appear and if that was the scenario i   question just thinking out loud whether we get one  more high up here for a fifth and then fomc causes   this to double top and we get a bigger reversal on  risk off or flight safety so as a plan b if we get   a less hawkish fed or we see the dollar selling  off whatever reason any pullback in this market   is viewed as an opportunity to look for long  setups into the 96.93 next is AUDCHF this is a   commodity currency versus safe haven asset so this  is a risk-on move really any continued pullback   on dollar weakness let's say we get a breakout to  the upside after fomc i am going to be looking for   long positions into the 0.7122 next is GBPAUD not  highlighted in purple because it's not one of my   favorite backup trades and the reason is because  the pound and the aussie would both benefit from   a weaker dollar but i am also going to be looking  at this in any break lower after fomc like this i   am going to be considering this an opportunity to  look for short setups into the one point seven one   seven four next is CADJPY took out both targets to  the upside last week CADJPY has been a fantastic   long position and i highlighted the breakout down  in this area we've been long all the way up here   we started to pull back last week as we've got  a little bit of risk off coming into the markets   because of the inflation print i question once  again is this one two big three and do we get   a double top up here for a four and five and then  a sell-off on a flight safety and a hawkish fed   well we'll wait until wednesday and  if on wednesday for whatever reason   we get the fed being more davis than expected  or we see a reversal to the downside in the dxy   you would likely see this jump into the upside  and this would be the opportunity to look for long   positions into the next gear resistance the 109.56  so the purple ones here are my favorite backup  

trades for next week and the final backup trade  here which i like the most is cad frank again   commodity currency versus risk off currency we  took out the target almost to the pip at 0.77910   any pullback and a breakout after fomc is going  to be viewed as an opportunity to look for long   positions into the 0.7863 okay so wrapping up the  video with XAUUSD, XAGUSD and bitcoin starting   with the gold silver ratio we're starting to  break out to the upside and what happens in a   flight safety you see XAUUSD outperforming silver,  XAGUSD has been my preferred short in previous   videos and it has actually as you can see from the  gold silver ratio underperformed gold and silver   remains my favorite short out of both XAUUSD  and XAGUSD going into next week next is XAUUSD   now XAUUSD and XAGUSD were interesting at the  end of last week because we saw rallies in both   of these markets on the inflation print is that  initial knee jerk reaction the problem is if we're   going to see a flight safety gold actually  tends to suffer because the dollar rallies   so that in itself is a headwind to a strong  XAUUSD but also you see XAUUSD being liquidated   so people can cover margin in a capitulation  so going into next week i do still favor short   positions in XAUSUD but i'm unlikely going to be  trading XAUUSD next week i'd rather short XAGUSD   any brake lower in gold and i would like to  attest in resistance here i would like to see this   momentum peter out in case this is going to show  a bigger breakout to the upside i'd like to see   this peter out and in fact start to reverse like  this and break down lower any reversal lower in   XAUUSD would be viewed as an opportunity to look  for shorts into the 1789.28 next is XAGUSD now you   can see the inflationary rally in XAGUSD at the  end of last week as well just as we saw in gold   and look at this setup 2145 is the major major  breakout level to the downside where we could   see a big sell-off in silver we came and retested  it and remember i said to you just like the euro   setup look for capitulation well in this case  there was no capitulation but i can guarantee you   those who bought in in this area are now placing  stops here and if this comes down and breaks the   2145 and then this low you are going to see silver  coming down in all likelihood to the 20.51 and  

of course in any flight safety you will also see  XAGUSD suffer so i am bearish on silver and silver   is one of my preferred plays heading into next  week that's silver shorts and the final market   we're going to look at here is bitcoin and bitcoin  is highlighted in gold here this is something i'm   keeping on in fact i'm already short bitcoin i  tweeted this out last week as it was starting to   break down and i do think that bitcoin could be  on the verge of a real capitulation like this to   the downside why because not only are we breaking  out of this but this is below the major breakout   level of the 32 935 in bitcoin where a brand  new trend can be formed in the bigger picture to   the downside so any pullback in bitcoin is still  viewed as an opportunity to look further declines   into first of all the previous low and on to the  24 307 okay so finally let me just leave you with   this chart guys why am i talking in this video  about a capitulation of flight safety in stocks   two reasons one we are at the verge of a  potential major breakout in the dollar index   and two we go into next week with the fed having  to address an increase once again in inflation   with the potential for the fed to get even more  hawkish and aggressive and for those of you who   follow this video and have been following since  april you will know i posted at the time and   i put a video out and this was in fact in the  weekly forex forecast videos that the russell   when it broke the 1894 was potentially the start  of a major trend change to the downside and what   have we had since we've had a break a pullback  and a re-test and this is where we go into fomc   next wednesday and this is where stocks currently  sit with the prospect of a hawkish or even   unexpectedly hawkish fed next week and that is one  of the reasons why i'm talking about a potential   flight safety next week 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 thanks to   everybody who does that on a regular basis and  a big thanks to everybody who has subscribed to   the channel so far i want to wish you a fantastic  weekend 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

2022-06-14 20:20

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