Weekly Forex Forecast (14/03/22) EurUsd / XauUsd + Forex Trading Plan! [HD]
hey traders it's john fortune here with this week's weekly forex forecast we're going to have a quick look ahead to next week because we have fomc coming up on wednesday and this is likely to dictate the market moves not just in forex but also in the stock markets before moving on to the currency scorecards last week seven out of nine closed successfully in the direction highlighted and the only two that didn't took out their targets first and then reversed so a really good week last week and as volatility is picking up it looks like there's going to be lots of opportunities in the markets for the foreseeable future and once we've looked at the scorecards and the best setups and markets heading into next week in the forex markets we're going to move on and finish with stocks gold silver and bitcoin the economic calendar just for last week you can see we did have euro interest rate decision on thursday ecb came out more hawkish saying they were going to start to run their balance sheet off earlier than expected and yes some were looking at this as a hawkish surprise however when you take everything into account you're looking at over 40 percent ppi in italy which is usually a leading indicator of cpi inflation and they still have interest rates at zero percent so whilst last week was more bullish than expected or more hawkish than expected from the ecb i wouldn't say the situation there is particularly hawkish or bullish in terms of the euro itself as a currency fundamentally if we move on to the upcoming week you can see the big one here is fomc on wednesday so don't be surprised to see the markets kind of just doing nothing into wednesday if that's the case you know why it's because of the upcoming interest rate decision you're most likely to get next week opportunities from wednesday onwards the markets will probably just correct into wednesday and then start to move from fomc and it will be the tail end of the week most probably where you'll see most of your opportunities so might be a little bit of patience required next week with fmc on wednesday you don't want to chop your account monday tuesday and wednesday into fomc and then be playing catch up when the market starts to move from wednesday onwards so sometimes the market can move pre fomc but most of the time statistically it doesn't so if you are going to get involved in dollar pairs pre fomc i would say don't go too crazy don't take too many positions because more than likely in terms of probabilities they're just going to move sideways or correct into wednesday and you can see that the fed is expected to raise rates on wednesday and this is on top of their asset purchases also finishing this month just finished so we're seeing the dollar rising we were bullish on the dollar last week and in previous weeks and from everything i'm looking at on the chart unless the fed comes out and say perhaps fails to raise rates which i think is very unlikely given the inflation print out of the u.s last week was almost eight percent it does look to me as it currently stands like the dollar is very much set to outperform in the near term and when we go and look at the scorecards which score one month forward so they're looking out projecting out into the future one to four weeks you're going to see that they are also painting this picture as well for the us dollar so apart from that there's not too much else we need to discuss we do have an interest rate decision out of the pound on thursday because this is so close to the end of the week i would still look to trade pound pairs before thursday because you might see the pound pairs moving and then on thursday reversing for example so because it's quite near the end of the week i am prepared to trade pound pairs during the week but again i just won't go too crazy you know when you have these large interest rate decisions coming up if you want to take positions beforehand you can but it's just common sense not to take too many positions in those pairs before the event takes place you don't need to take that much risk leading into an event such as an interest rate decision okay so let's have a look at the scorecards heading into next week and for anybody new to the video what we're looking at here is we're looking at the one month forward score for these currencies it basically takes macro data models and it projects into the future one to four weeks the scores for the currencies and in last week's video you can see the australian dollar was scored the highest and the aussie actually performed well to the upside last week and we also had the us dollar new zealand dollar slightly bullish to neutral because one is bullish to neutral bullish strong bullish and near-term overbought bearish neutral bearish strong bearish bias and near-term oversold and you can see that we had a strength of the dollar last week and the new zealand and that makes up the top three currencies heading into next week the us dollar is number one that's my favorite long heading into next week followed by the aussie and new zealand and to the short side you can see last week we had a near-term oversold reading in the euro it does not mean go out and buy the euro what that means is the euro is very weak but in the short term you should probably be looking at booking some profits on any shorts because more than likely you're going to get a bounce in the euro and that is exactly what we saw last week we saw a bounce and it goes back to a strong bearish bias or a score of -3 this week so the number one currency pair i'm going to be looking at heading to this week is euro dollar to the downside followed by europe aussie to the downside also going to look at your new zealand to the downside and after the euro the pound is projected to be the second weakest currency so i am going to be looking in this week's video at pound dollar to the downside pound ozzy to the downside pound new zealand to the downside in terms of the frank and the cad they're only kind of bullish and bearish to neutral so unlike the japanese yen which is not as weak as the pound of the euro it does still score a bearish rating over the next one to four weeks so in this week's video i'm also going to be interested in in the new week coming up the new trading week i am going to be looking at once again us dollar yen to the upside aussie yen to the upside and new zealand yen to the upside and in fact these were markets although the yen was bearish to neutral last week these were some of the markets we actually looked at and they did perform nicely and it looks like those moves are set to continue into this week as we have no change here in the scorings in fact they've become more bullish and more bearish in those directions okay so let's have a look at the individual currencies starting with the dollar index and we're on the daily chart here just to get a better picture of the individual currencies what they're doing you can see the dollar is very very strong if anything it looks like it's starting a third wave there's a one there's your failure to make a low and there's the break of the previous high and it looks to be training to the upside we could see this going much further and now we took out the target of the 99 last week it does look like the 100 level is in play and in fact the next target is the 100.52 so confirming everything we looked at in the scorecards here this really is my favorite long going into next week next is the euro now last week the euro took out its target the 1.08280 and if you had combined the scorecards
with a score of -4 or near-term oversold for the euro with the targets here you could pick the low of the week in this if you were looking to book some profits from shorts either way the euro is still very weak and any pullback perhaps we start to do this into fomc this is what i'd be looking for wouldn't be surprised to pull back into fomc and then the next move down from wednesday onwards so i am looking for the declines in the euro it's my favorite short next week next is the pound last week the pound took out both targets to the downside and there is nothing bullish about what we're seeing here in the pound it's just broken a previous major low and this by all indications is the next bare leg to the downside after this correction from december so i am looking for the 1.2984 as the next target to the downside and i do like pound shorts going into next week next is the swiss franc now the swiss rank is an interesting one and this is why we always mix the technicals of what we're seeing in the futures markets with the scorecards because the scorecards are telling you that swiss franc overall is bullish to neutral especially when taken into account against other assets however when you look at this technically you can see this is bearish so technically speaking we could be coming down to the 1.0577 so what this means is the bullish to neutral score for the swiss franc i would not use that to go along the swiss franc because you may find that turns bearish to neutral or it just kind of ranges between bullish to neutral and bearish to neutral so this is telling me that if i am looking to go long it really should be in the dxy and potentially the new zealand and aussie pairs which we're going to look at but long swiss franc opportunities next week now for me are off the table because of this i wouldn't short it either but i wouldn't go along the swiss franc so this is really denying what we looked at in the scorecards to some extent although it's not completely denying it because the scorecards are telling you it's basically neutral there's no strong bias one way or the other overall next is the japanese yen now look at this this is where you have this one two three four five and then you have this sell-off this to me very often when you have this kind of ending diagonal pattern which breaks downwards this actually can precede quite steep sell-off in price and look at the daily candle we had here breaking the low and the previous target of the 0.008603 if i take that off you can see this looks to be the start not the end the start of a major break to the downside in the end and i would expect to see further weakening certainly heading into next weekend this confirms what we're looking at in the scorecards as the yen being one of the best shorts heading into next week next is the cad the cad is kind of bearish to neutral and i would say the technicals here are just really confirming that the cat is suffering because of a stronger dollar but at the same time it's kind of being supported by the crude oil price so this is what makes the cad currently choppy not a great currency pair i don't think it's the best one heading into next week i would like to see this breaking out of this kind of range or contraction we've been in more or less since august before i really got bullish or bearish on the cad once again so bearish to neutral cad not really too interested in this market next week aussie dollar the australian dollar has rallied as we went into a bit of a stagflationary mode we saw uh the commodity prices really increasing in price and this has helped push up the australian dollar and the new zealand dollar the problem i have here is that i believe we're going to see stagflation turn into deflation and one of the first early signs of that will be the australian dollar and the new zealand dollar starting to weaken coming off these highs and turning bearish once that happens if we remain strong in the us dollar this is your early indication from the forex market that we're turning from stagflation into deflation and if that happens you may find that a crash is on the horizon the interesting thing about the current scenario is that when you look at the macro data and you look at say for example pmis the american economy is currently growing but the markets themselves are setting up for a big risk-off move and again in terms of the forex markets that will start to look to materialize once you see the australian dollar new zealand dollar weakening whilst the us dollar remains strong as it currently stands the aussie dollar is still strong for the time being i'm looking for the 0.7465 as we have the stagflationary conditions as it
currently stands and does make my second favorite long play next week and finally new zealand dollar you can see we took out the target set last week and looking at this we are quite close to breaking what you can see over here this high and this high this is a significant pivot point in the new zealand dollar futures market and if we start to break below the six seven 970 with momentum you might see the new zealand pair struggling a bit to the upside so keep an eye on this next week especially with fomc it may be the case that the dollar pairs are really the best pairs to trade especially post fomc but relative to the other currencies you can see new zealand is still strong okay so looking at the markets themselves starting with crude oil last week we did take out both targets to the upside in crude oil this market is extremely volatile we had a 12 down day at one point so if you are looking to trade crude oil and you start to trade crude oil itself especially with tight stops you're probably going to get stopped out because of the volatility there's nothing wrong with just looking for derivatives of crude oil you can get etfs you can get crude oil stocks that you might want to play you don't always have to trade the underlying asset because the name of the game is to make risk adjusted returns there's no point making huge returns for huge risk you want to make consistent returns over time and that means reducing the volatility in your returns and you're not going to do that by getting involved in extremely volatile markets especially if you're using tight stops so i am looking further advances in crude oil if you are looking to trade this i would trade it with a very wide stop i am looking for another run into target 2 from last week at 128.17 next is EurUsd, EurUsd is my favorite short going into this week i am looking for it to come down to the 1.0781 what would be pretty good is if we could start to correct like this and we start to correct into fomc and then on wednesday we get a big sell-off to the downside that would be my opportunity to look for further declines into the 1.0781 next is GbpUsd, GbpUsd took out both targets to the downside last week heading into this week i'm looking for the declines because we have an interest rate decision on wednesday and thursday out of the uk and the us what would be good is to get an opportunity in this market before wednesday so if the market pulls back like this sort of maybe on monday i'll be looking for short opportunities into the 1.2979 from say monday tuesday wednesday onwards and if i could be out of a GbpUsd short leading into fomc that would be great so i do like pound dollar for further declines next week but just bear in mind we have two interest rate decisions on this pair so could get a little bit choppy next is UsdJpy now we took out both targets in this market this was a really nice move last week in this pair coming to this week i am looking further advances in this market look at the momentum we have here and when you take into account the fact that GbpUsd has two interest rate decisions next week i actually think us dollar yen is more of a preferable market than pound dollar because it doesn't have two interest rate systems it just has fomc so any pullback in this market i'm absolutely going to be keeping my eye on any bullish breakouts to the upside and maybe again we pull back and then on wednesday fomc we rally that would be the opportunity to start to look for long positions into the 118.55 so EurUsd and UsdJpy are my two favorite next week and if they were the only two markets i traded next week and we got really nice moves in both of them i'd be a very happy man next week next is your aussie euro aussie bounce from the target previously set and i am looking for the declines in euro aussie we've already started to break down somewhat so any pullback in this market will be viewed as an opportunity to look for bearish reversals down towards the next kiev supports the downside at 1.4431 and once it takes this out if we can get through here i'm going to be looking down towards
the one point four four three ten pound aussie we do have an interest rate decision out of the pound towards the end of next week so what i would like to see in this market is any pullback we came quite close to the target any pullback up in this area would be viewed as another opportunity to look for shorts this was a good short last week any pullback a good opportunity to look for shorts once again down to the 1.7747 and ideally i'd like to see this pull back and sell off again before thursday or before wednesday so i'd like to be in and out of any of these pound pairs between monday and wednesday evening let's say before fomc next is aussie yen last week this was highlighted as a market to keep your arm and look for trades to the upside we did take out the target set heading into this week i am bullish once again and any pullback in this market will be viewed as another opportunity to look for bullish setups into the 86.21 euro new zealand we did bounce from the previous target at the 1.5667 i'm just simply viewing this as a bear market bounce and any continued pullback is another opportunity to look for short positions in this market down to the one point five six six seven once again and then on to the one point five four seven forty next is pal new zealand again we came and took out the target in pound new zealand at the 1.9104 heading into this week i am still bearish on this market and it looks like now
we've had the breakout of this correction here we're setting up for a bear flag so any pullback i am going to be looking for short opportunities down to the 1.8859 and as i say preferably i'd like to get these opportunities be in and out between monday and wednesday before fomc because this market is likely to get pretty choppy or volatile from wednesday onwards because you're going to have two interest rate decisions in three days and finally new zealand yen this was a market highlighted to the upside last week as one of the better opportunities we took out both targets and coming into this week any pullback once again is simply viewed as another opportunity to look for bullish setups bullish breakouts into the 80.43 so finishing up with stocks gold silver and bitcoin and looking at the stock market here we came and took out the target set last week four one six nine point two two in spx now i said earlier on in the video that the markets were pricing in or setting up for a big risk-off move and there are a number of indications of this the first is of course that i've mentioned in previous videos this low over here being broken was in the near term a trend change in the spx and also we've seen these in other stock markets and we're having this trend change alongside what looks to be coming up and out performance of the us dollar which is what you see in risk-off scenarios and another thing we can look at here as well which adds to the picture is the spread between the 10-year and the two-year us treasury yield if we have a look here at the 10 year minus two year you can see that very often when we go through this in the free gmt course when we have this spread crossing below zero in other words you're seeing the two-year inverting relative to the 10-year you're seeing the yield on the two-year outperforming or higher than the yield on the 10-year and this usually precedes recessions and big risk-off moves you can see this happened back in 2019 and of course we had the recession of 2020. we are now making our way back towards the zero level here we're making our way towards an inversion in the 10-year and the two-year spread and not only is the 10-year minus the two-year quite close to inverting which is causing downward pressure on stocks if we look at the most recent scorecard updated on friday you can see the 10-year on a one-month forward-looking basis is projected to be the yield which underperforms the most and you can see the two year is actually quite bullish projected into the next one to four weeks and the three month which also when you get a three month inversion against the ten year that is also a sign of a recession coming up the three month is the strongest scoring currency over the next one four weeks so i would expect to also see not just the tens twos heading towards inversion but also the ten and the three month heading towards inversion as well if that's the case and these invert you almost certainly have a major risk off move coming up and a recession in the us and also globally because if the u.s goes into
recession everyone's going into a recession so going into this week i'm looking for the declines in spx any pullback will be viewed as an opportunity to look for decline into the 4063.35 the other thing to remember is as the yield curve starts to flatten this is telling you that financial conditions are tightening in the us because banks borrow money at the short end of the curve and they lend money at the long end of the curve and so this is actually reflective of a tightening of financial conditions which of course is bearish for stocks next is the nasdaq now last week i was bearish on the nasdaq we did pull back somewhat and sell off any continued pullback in this market is simply viewed as another opportunity to look further declines into the 1306.27 and if we break through here we're going to be looking down towards 12 247.20 next is the dow jones the dow jones was the only stock market to show any kind of technical strength last week and it has ultimately rolled over with the rest of the stocks any pullback in this market therefore is going to be viewed as an opportunity to look further declines into the 31 646.14 next is the russell now the russell i have noted in previous videos although i am bearish
on the russell it is kind of in no man's land it's right at that point where it could break higher and start a new trend to the upside or if it breaks this low over here we could see possibly even a crash in the russell this is really a significant area where the russell's at now we've just discussed and you can see from what we've just discussed my own personal view which is that the conditions are there for a sell-off in stocks for further declines in stocks the fundamental conditions as it currently stands are not there for a reversal to the upside so although there's no guarantees in markets you may see a relief rally if something comes out between ukraine and russia for a ceasefire or something like this but in terms of probabilities and the fundamentals the risk is clearly weighted to the downside in stocks so any pullback in this market next week is viewed as another opportunity to look further declines into the 1892.45 and if we break this low over here then it'll be very interesting to see what happens because as i said you could actually see a crash down below this level and that would actually filter through to the potential outperformance that we're seeing in the scorecards over the next one to four weeks because if you get a crash in stocks the us dollar is going to rally and finally we have the nifty the nifty sold off and took out the target set in last week's video and bounced from the 15 894.20 because we bounced all the way back up more or less to the beginning of the week this target remains in place and any continued pullback is simply viewed as an opportunity to look for bearish reversals back down to the 15 894.20 and finishing up with gold silver and bitcoin starting
with XauUsd we took out both targets to the upside XauUsd has been extremely volatile and i have been warning of a major XauUsd breakout since the beginning of this year in the weekly forex forecast videos i highlighted the 1877.24 this black level here that was the major breakout point and as it currently stands we have this momentum and if we take the targets away from last week you can see we're setting up what looks to be a ball flag here so any continued pullback in gold is simply viewed as another opportunity to look for a bullish breakout into the 2074.27 and for those who have been following the weekly forecast for a number of years or for a long time you will know towards the end of last year or last year i was talking about 2075 as a long-term target for gold and it does look to me like we are going to reach that now over the next couple of weeks and when we talk about the markets pricing in a big risk off move both the dollar and gold outperforming at the same time is another sign on top of the yield curve on top of the technicals in stocks etc that the markets are pricing a big risk off move because what you're seeing is you're seeing a flight to safety not just in the yield curve but also in the precious metals like gold next to XagUsd last week i was bullish on XagUsd we took out both targets to the upside i'm looking for further advances in this market so any pullback in XagUsd will be viewed as another opportunity to look for bullish breakouts into the 27.45 and last but not least we have bitcoin now bitcoin is technically structured to the upside and last week i did say that i was looking for potential run up towards the 45 649. we did get a spike higher on the breakout but the problem i
have with bitcoin currently is that in a risk-off environment which we currently have bitcoin tends to underperform we've seen this from the history of bitcoin it tends to be more of a speculative asset it moves up and down essentially with stocks and i wouldn't be surprised to see politicians who want to introduce central bank digital currencies which is a terrible idea in my opinion but i won't be surprised to see them using the ukraine russia situation in an attempt to crack down on cryptos and so if you are long and you see some regulation coming out against crypto currencies under for example the pretense that they want to prevent russian money from flowing out and avoiding sanctions you know into cryptocurrencies whatever the reason is i wouldn't be surprised because it's in direct competition to the central bank digital currency that they start to talk about more regulation in the coming months so just something to be aware of if you are bullish i personally wouldn't trade bitcoin because of this right now but if you do want to trade bitcoin i would be looking technically for any break higher and that would be the opportunity to look for further advances into the 45 694 so that is it for me for this week guys as always i hope you enjoyed this video if you did please let me know by liking sharing and subscribing big thank 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 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
2022-03-15 04:00