Weekly Forex Forecast (19/12/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

foreign ERS it's John Fortune here with this week's weekly  Forex forecast I hope everybody's having a great   weekend this is the last weekly Forex forecast  of 2022 as next Saturday is Christmas Eve and   the following Saturday is New Year's Eve so we  will be back on January the 7th 2023 with a new   weekly Forex forecast but for now heading into  next week there are some major risk off signals   we need to be paying attention to so if we start  by looking at the acwi which is the global Equity   index now why would we start by looking at this  when we're looking at a weekly Forex forecast   well because what's happening in global equities  is going to drive what you're going to see in the   Forex markets because as Equity sell off if we  start see risk off returning into equities as   it looks like it's going to be the case in all  probabilities this is going to drive risk off   in the Forex markets and this is why going  into next week you can see in the acwi the   global Equity index we have broke we have broken  a head and shoulders reversal in a downtrend we   failed to actually make a new high and now this  Market in all probability is heading back to the   lows at least if not further as that happens this  will almost certainly Force risk of actions from   Forex participants so you would expect to see the  Japanese Yen appreciating in value the Swiss franc   and also the US dollar the US dollar is not quite  there but I do think next week we see a reversal   in the dollar and I do think we're looking at the  bottom in the dollar Index as we're going to see   in today's video but you have to take note even  if you're just trading Forex in what's happening   with equities globally because this is just one  of many signs that risk off is going to be coming   into the markets in the near term a quick look at  the economic calendar shows us we have an interest   rate decision out of Japan next week so don't be  surprised if the empires get a bit volatile on   Tuesday but the big fundamental events came last  week and they were first and foremost us CPI which   came out better than expected then we had the FED  on Wednesday and we had the ECB on Thursday now   these were really important events last week  because they're giving you an idea of what's   coming next fundamentally first and foremost  we had CPI which came out better than expected   and considering this entire tightening regime  monetary policy in the U.S has been about higher   inflation we failed to get a sustained rally in  the S P 500 last week and as you've seen with   the acwi global acties index and also with U.S  stocks and other stocks they actually reversed   and sold off after this so if a better than  expected CPI reading out of the US cannot   rally stocks it's very difficult to see what the  catalyst is going to be to drive stocks higher as   especially since the entire regime is currently  about inflation second we had frmc on Wednesday   on top of this the FED did not come out dovish  on Wednesday they came out and stated that the   terminal rate was going higher and that in future  press conferences you could see the terminal rate   in other words the highest the peak of interest  rates going even higher and it's my belief and   it has been for a while and I've been saying this  to GMT members that we are going to see a higher   terminal rate now this was important because it  gave the message that the FED is not going to   ease monetary policy in any significant way over  and above just slightly slowing the pace of rate   hikes this was a hawkish meeting and what this  led to was the ECB coming out on Thursday and also   being hawkish however the big takeaway from the  ECB meeting on Thursday which is very important is   that the ECB projects the EU economy to go into  recession in over the next couple of quarters   and Lagarde even said that that could be this  quarter already she said the turn of the Year Q4   potentially q1 and we're in Q4 so what the ECB is  saying is that the EU may already be in recession   and is expected to have negative GDP over the  next couple of quarters now if that's the case   this has real fundamental implications because  we've just seen Jerome Powell stating that he is   not going to be pivoting anytime soon however if  the Euro area goes into recession in the near term   this is almost certainly going to force the ECB to  start to cut rates before the FED because the U.S   economy is doing much better than the EU economy  and if that's the case fundamentally this is going   to put downward pressure on euro dollar over the  next few quarters so big events last week with   fundamental implications that as Traders we really  need to be thinking about three to six months out   okay so let's have a look at the scores for the  coming week and last week was a fantastic trading   week despite the fact we had lots of events going  on there were tons of opportunities last week and   the Canadian dollar has been highlighted as the  best Forex play to the downside and we've had   really good sell-offs in the Canadian dollar  last week it just kind of corrected a little   bit but it is still highlighted as one of the  best shorts alongside that going into this week   is the Australian dollar still so really the two  commodity currencies we looked at last week as   best shorts are once again best shorts heading  into this week but the big takeaway from last   week is the change in scores because the US dollar  has gone from minus one to zero for the first time   in the major scorecards and the Euro also has  increased its probability score and what this   means is at the same time by the way as the Swiss  franc and the New Zealand has slightly weakened so   what we have here is we have the US dollar which  is a risk off currency a slightly increasing its   score and going out of the negative side to the  neutral side and the Euro increasing its score   from two to three now the Euro itself compared  to the Yen the dollar and the Swiss franc is not   a risk off currency but in a risk-off environment  the Euro will appreciate against the New Zealand   dollar the Australian dollar the Canadian dollar  and also the pound so what we're actually seeing   here is we're seeing a projection of risk off  in the probabilities for the majors over the   next four weeks on a rolling basis and alongside  that we also have the New Zealand dollar which has   actually been the strongest commodity currency  recently now starting to weaken so when you put   all of this together going into next week I do  favor really only the markets that are starting   to benefit in a risk-off environment because  if we start to get a quicker sell-off or an   increased sell-off in the stock market this will  bring risk off and it is the risk off pairs that   will be performing the best and at the very least  if the risk from Global equities from U.S equities   and also EU activities between the UK Equity index  if the risk is for a bigger risk-off move at the   very least we don't want to be on the wrong side  of that and that is the risk of getting involved   with risk on pairs as equities are starting to  break down you risk being on the wrong side of   a bigger risk-off move okay so quick look at the  individual currency starting with the dollar Index   now the dollar Index you can see is really lacking  momentum and we have these choppy one two three   four five waves down and this is looking like a  bottom in the dollar now I wouldn't necessarily   go out and buy the bottom or the top in these  markets because there are markets you can trade   which are not bottom or top picking such as a US  dollar CAD which we'll look at however I would   be wary of being a short dollars going into next  week with stocks starting to break down because   because it does look like we're probably going  to get short covering rally in the dxy and this   is backed up as well by what we're seeing in the  scorecards going from -1 to zero on the four week   forward-looking probability score so the US dollar  I am kind of bullish on it but I'm bullish in the   sense that I expect this to snap back rather than  this being a market which is kind of trending to   the upside next is the Euro now the Euro traded  into the 1.06710 which I highlighted was the four   year breakout so really what we've had is we've  had a breakout of a four-year range a pullback   and currently a retest now this is exactly the  kind of area where if you were going to get   further declines in the Euro you would expect  that to happen because it's a major breakout   and a retest so based on where we are in the Euro  this does also fit in with what we just looked at   in the dxy potentially bottoming next week but  again you don't necessarily want to go and pick   bottoms and tops and in a risk of environment if  the Euro sells off you can still see it outperform   the Aussie you can still see it outperform the  Canadian dollar because those markets will sell   off faster in a risk-off event or a risk off  environment so you could have the Euro selling   off next week and still rallying against the  Australian dollar and the Canadian dollar next   is the pound this has been really strong after  the flash crash down here and we have came up   and we tested previous highs we just missed the  target but again this is now really looking like a   market that's running out of momentum and as this  happens as this lack of momentum continues every   time it tests the highs this causing people who  are sitting on profits to get itchy fingers and   cover their long positions and that is what ends  up causing the reversal so again this is kind of   at the top and I would still favor the pound  versus the Australian dollar and the Canadian   dollar but I would not be surprised to see  this selling off and uh these Longs start   to capitulate if we start to see stocks selling  off harder and risk off coming into the market   next is the Swiss franc we came up and took out  the target set last week and the main takeaway   here is not so much the next Target which we're  quite close to it's this major double bottom in   the Swiss franc and I highlighted to you that  this was actually a major breakout we came up   tested the top we then Consolidated and now we've  started to break out if you zoom out here you can   see that this is potentially the start of a much  bigger move up in the Swiss franc and this is also   confirming incoming risk off and actually confirms  that breakdown that we looked at not just in the   U.S stocks and the S P 500 but the global Equity  index we looked at at the beginning of the video  

and this is not new from last week this is  something we've been tracking in the weekly   Forex forecast for a number of weeks next is the  Japanese Yen also the safe haven asset you would   expect to outperform in a risk-off event and we  have seen big moves up short covering rally after   the big sell-off we've had all year we've come  back we've retested the breakout level here of   this minor inverse head and shoulders and now  it looks like this is trying to break higher   and again this is exactly what you would expect  to see in our performance of the yen in a bigger   risk-off move so again another Safe Haven currency  which is confirming that breakdown we looked at in   stocks next is the cad the cad is resolving  A Bear Flag as it currently stands and I am   looking for the previous low in the 0.70880 we've  highlighted this in previous videos and this is a   market I expect to continue lower Aussie dollar  huge Bear Flag in Aussie we really came back and   tested the low over here kind of broke above it  and now we're struggling failing with momentum   or rather a lack of momentum and again this is  indicative of a reversal because anybody who's   long is going to be wanting to start booking their  profits and that's what causes the bigger snapback   and so again this is something you'd expect to see  in a bigger risk-off move you would expect to see   the Australian dollar selling off harder than an  underperforming pretty much all the other markets   next is the New Zealand dollar now I highlighted  in last week's video why the New Zealand dollar   this rally was so out of the ordinary and how  it's unlikely this could be sustained and last   week it does look like we put in a double top  and I am looking for the declines down the New   Zealand dollar and if we are going to get risk  off coming in with the stock market continuing   to sell off down to the lows this is going to  catalyze the next leg down in the New Zealand   dollar which we've been waiting for quite a  long time vis-a-vis the Swiss franc the Yen   Etc okay so let's look at the markets themselves  starting with crude oil crude oil has been a very   good short recently and it is highlighted as the  best short in fact in the commodity sector that   we look at and last week there was a really good  short-term trade here in crude oil but what I do   think is this this consolidation correction is  likely to continue any pullback once again next   week is going to be viewed as another opportunity  to look for shorts potentially down to the 67.90   next is Aussie yeah now Aussie yen is my favorite  Market heading into next week and we have to look   at this on the daily chart because it's the bigger  picture that you need to be paying attention to   this is a market I've been banging the table over  and saying look this is signaling potentially a   big incoming risk-off move because this is the  risk on risk of pair essentially Aussie being   one of the most sensitive to risk on or in other  words the most risk-on currency and the Japanese   Yen being the most risk-off currency so this  is now breaking down with momentum towards   the 90.834 and this was a fantastic shot from  last week and the opportunity to really to get  

involved with this before the break was last  week highlighted in last week's video however   for anybody not yet involved any pullback next  week for the break up towards this area that   would probably represent the final opportunity to  get involved to the short side before the break   of the 90.834 and I personally am not looking at  booking my profits at the 90.53 although that's   the next Target to the downside short term if  we break the 90.834 this is potentially a major   reversal in Aussie Yen and I would be looking  for this to actually break both these levels   with momentum that would be a sign that this is a  real reversal if we get that capitulation to the   downside below the 90.834 so keep an eye out for  Aussie Yen because we're very close to that level   now next is Euro Aussie took out the 1.58390 which  was the target from last week going into this week   big momentum upside reversal after this kind of  double bottom down here and momentum precedes   price so I am looking further advances in this  market any pullback any consolidation is viewed   as an opportunity to start to look for bullish  entries into the 1.6195 next is Aussie Frank came   right down to the Target highlighted last week  at 0.6208 any pullback in this market next week  

is simply viewed as another opportunity to look  for shorts really nice momentum down to 0.6150   another Market that will certainly outperform in  other words to the downside sell-off in the event   that stocks continue to sell off next week  and in subsequent weeks so we get that risk   off coming into the markets and final Aussie  pair is pound Aussie now I prefer the other   three markets highlighted here because the Swiss  franc the Euro and the Yen will all outperform   the pound in a risk-off environment so I would  rather be long those vis-a-vis the Aussie but   pound Aussie is still structured to the upside  it is highlighting the scorecards as a viable   long opportunity any pullback is viewed as an  opportunity to look for a breakout in this market   I'm going to be looking up towards the 1.8508 as  the next care resistance the upside next is CAD   Yen now you may be saying well why do I prefer  the Aussie pairs over the cad pairs well because   if we are going to get a bigger risk off moving  stocks the Australian dollar actually tends to   underperform the Canadian dollar and the Canadian  dollar has been so extended and selling off so   hard you've seen the scorecards it's actually at  minus four for the majors that there is a chance   that it corrects a little bit next week before  continuing to sell off so for those reasons I   do prefer the Aussie pairs but any pullback in  CAD yen is simply viewed as another opportunity   to look for shorts into the 97.80 next is eurocad  so similar to cadien I would probably like to see  

a pullback first because we're quite extended  here but any pullback next week is viewed as an   opportunity to look for bullish setups up towards  the 1.4629 and eurocat again would benefit from a   risk off or a continued sell-off in stocks and the  final pair out of my top six that I'm going to be   focused on next week out of the majors is CAD  Frank this has been a really nice Market to the   downside we took out Target last week any pullback  in this market is simply viewed as another   opportunity to look for bearish reversals down to  the 0.6747 and the final CAD pair is pound CAD we   took out the target set last week at the 1.68  280 almost to the PIP and coming into this week   we started to pull back so again any continued  pullback I am going to be looking potentially   although again I prefer these three markets this  is a market you can look for outperformance in a   risk-off environment and any break to the upside  is viewed as a potential opportunity to look for   Longs into the 1.7017 okay so let's have a  look at the dollar pairs starting with euro   dollar pound dollar US dollar Franc these three  are in purple because in in terms of trading if   you're going to trade them with dollar strength  you're essentially picking tops and bottoms so   the Aussie dollar and the US dollar CAD pairs  are probably going to be your best bet if you   want to trade the dollar however I still want to  look at euro dollar pound dollar US dollar Franc   because it gives an overall picture of what's  going on you can see in euro dollar we tested   the four year breakout and we're lacking momentum  in this kind of sort of ending diagonal kind of   pattern you can see here we kind of overshot and  this is kind of contracted into a point now very   often you get this just before reversals doesn't  necessarily always precede major reversals you   know you can often see this pattern resolving in  fact the target for this pattern tends to be the   start of it down here this level here at least you  know even if it's going to continue higher but in   this case if you put everything together what  we're looking at in stocks what we're looking   at in the major Safe Haven currencies it is  indicative of a risk-off move and I would not   be surprised to see this be the top in euro dollar  we also have a large outside daily candle reversal   from the ECB meeting and that's not surprising  when you consider what I said at the beginning   of the video based on the fundamentals that the  EU is going to go into a recession before the US   and therefore they are going to have to Blink  first and actually smash rates down before the   US does that is fundamentally bearish for euro  dollar next is pound dollar again we came very   close to the Target and it does look like we're  setting up for a double top now the best position   into this would be if we break down lower because  we haven't yet broken this trend but if you break   down lower and then we start to put in kind of a  lower high over here that would be the next best   opportunity to get short in pound all of further  declines as it stands it looks like this is going   to roll over but it's picking a top still at  the moment because the uptrend this counter   Trend move is still intact US dollar Swiss franc  pretty much the opposite to what we just looked   at in the Euro lacking momentum with this kind  of ending diagonal pattern bit of an overshoot   down here and then we're snapping back so again  I would not be surprised to see this reverse the   target is the 0.95980 but if you do buy this you  are kind of picking a bottom in this market and   you're also trading the dollar against quite a  strong currency in the Swiss franc so I do favor   dollar strength the next week I do think there's  a very good chance we reverse but if you are   going to trade dollars it would be Aussie dollar  and US dollar that I think are the best because   they're both the weakest currencies vis-a-vis a  stronger dollar so the first dollar pair I would   be interested in it's Aussie dollar again look at  the lack of momentum up in this area this does now   look like it's starting to reverse and again if  you were to go long dollars even though they're   kind of neutral versus the Aussie and let's  say the dollar didn't strengthen it didn't go   anywhere you probably just see this Market correct  in which case you're not going to be on the wrong   side you're unlikely going to be on the wrong side  of a bigger losing trade it will just go nowhere   because your weak dollar is matched with weak  Aussie so that's why I like these two it's not   just for profits it's also to avoid being on the  wrong side of bigger moves so going into next week   any break higher I'm going to be looking for this  potential Head and Shoulders down to the 0.6493  

near term but I do think Aussie dollar is now  making its way down to the low over here towards   a 0.6100 and the final dollar pair US dollar card  you can see we are starting Trend to the upside   and so any pullback in this market is viewed as  an opportunity to look for Longs into the previous   high at the 1.3209 and in my opinion we can very  well break through here once again with momentum   so wrapping up here with New Zealand Frank you can  see we took out the major key area of resistance   the 0.60140 and we double topped we confirmed that  below here so although the New Zealand is not one   of the weakest I do think we could now start  to see this rolling over and since we confirm   the double top keep your eye out for a potential  reversal here next week because if we break lower   this is where we could see capitulation coming  in and it has been my opinion as you all well   know who have been following the channel that we  are still likely coming down to 0.5512 okay so   wrapping up the video with gold silver and Bitcoin  starting with the gold silver ratio you can see we   are trying to the downside and I've been favoring  silver over gold because of this however we're   starting to lack a bit of momentum and in Risk  off you would expect gold to start to outperform   Silver so I do question whether we're going to  snap back a bit but I don't have a strong bias   one way or the other when it comes to Gold versus  silver okay so starting with gold and you can see   neither of these are highlighted as some of my  favorite pairs why because we're right at Ikea   of resistance and if the dollar now starts to  Rally from that kind of ending diagonal pattern   as I think it will based on risk off as stocks  continue to sell off this is going to push gold   low but you're in a situation very much like euro  dollar pound dollar and US dollar Franc where if   you short gold here you're kind of trying to pick  a top because as it currently stands the reversal   the confirmed double top here would be below this  low over here and therefore you're still right at   the top of this move so I do think gold is likely  to sell off the next hog to the downside is the 16   8 1.76 but on balance you are jumping in a little  bit early you're anticipating that reversal in the   dollar if you short gold here but I wouldn't want  to be long gold either because we're at resistance   and the dollar looks like it could be set for a  short covering rally next is silver we took out   the target set last week the 24.052 heading into  this week if I scroll out a bit here on the daily  

chart you can see we've pulled back and retested  a major breakout very much like euro dollar this   is exactly where you would expect to see a market  start to bounce and when you put that into context   with everything else we've talked about in terms  of risk off including the dollar potentially   having a short covering rally next week I would  not be surprised to see silver topping out in   this area and starting to break down towards  21.70 again not on my best opportunities list   because as it stands we're still at the top here  we're still trending to the upside near term so I   would really like to see a reversal in gold and  silver before getting really bearish on these   markets and last but not least we have Bitcoin  highlighted in Gold because I do believe now this   is set for further declines we've pulled back in  Bitcoin after a period of consolidation retested   the prior lows and you can see we started to  sell off so any pullback in this area I'd be   looking for this right shoulder and this has been  opportunity to start to look for shorts down to   the Target set of the 14 858.30 so that is it  from me for this week guys and also for this   year thank you so much to everybody who has liked  shared commented and subscribed to the channel so   far this year we will be back on January the 7th  for the first weekly Forex forecast of 2023 the   only thing left to say is Merry Christmas Happy  New Year and I will see you all in the new year

2022-12-23 15:24

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