Weekly Forex Forecast (25/04/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

Weekly Forex Forecast (25/04/22) 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 as always this might be one  of the most important if not the most important   weekly forex forecast that i've ever put out and  the reason for that is on thursday i tweeted i   think the u.s stock markets are about to crash  and you can see with your own eyes what we've had   since i tweeted that out on thursday so we're  going to go through my playbook for the forex   markets next week as we always do but we're also  going to have a look at what's going on in the u.s   stock market because it has an effect on the forex  markets we have to look at that this week i'm also   going to discuss the yield curve control going on  in the japanese bond market and the effect this   is having on the yen and the risks of trade in  the yen both to the long side and the short side   this week as well so quick look at the economic  calendar for next week and we can see that we have   the french presidential elections on sunday this  means that euro pairs next week are best traded as   event pairs just as if you have an interest rate  decision it's best to wait till after the interest   rate decision and ideally if you can have a couple  of charts which means you can trade the outcome   either way we're going to be looking at that  today with the euro pairs we're going to have   a pair which we can trade or i'll be looking to  trade on one outcome of the french election and   if the reverse happens and we have the opposite  outcome of the french election there is another   pair that i think is going to provide a  good trading opportunity on that basis   so all euro trades next week really have to  be looked at through the lens of the outcome   of the french presidential election whatever that  will be on sunday apart from that we also have an   interest rate decision out of japan on thursday  and we're going to talk a bit about that later   but next week is in my opinion not a good week  to trade the japanese yen and i think there are   much better markets out there next week and if we  just jump ahead to the following week you can see   we do have an interest rate decision out of  australia we have an interest rate decision also   out of the us we have fed funds on the wednesday  and we also have a uk interest rate decision   coming up in two weeks as well and that all  takes place in the same week as non-farm payrolls   now the key takeaway though heading into  next week is a lot of this in my opinion   is going to be rendered irrelevant because we're  going to see volatility if stocks continue to   crash and i believe that's what's going to happen  so i think there's going to be plenty of trading   opportunities next week and in fact when we go  through the charts you're going to see there are   some opportunities next week which i think are  very very high probability opportunities which   are absolutely the place we want to be looking  at to make money next week okay so looking at the   scorecards for this coming week and we can  see some very interesting information here   the us dollar is currently now the top long  position in the scorecard models and this   takes the place of the australian dollar  which has dropped down to third place here   now why is this important well because when the  australian dollar is outperforming the us dollar   this is a sign and you've got the stock market  kind of correct and this is a sign of stagflation   and market crashes recessions they don't happen  during times of stagflation stagnation precedes   recessions deflation market crashes and  we're seeing here now for the first time   in a while the forex market confirming what we're  looking at in the stock market it's telling you   that deflationary positioning is starting to take  over from stagflationary positioning and this adds   weight to a continued crash in stock markets  heading into next week and to me this clearly   points to further downside risk in stocks the  second thing to note is we had a big jump in the   strength of the euro despite the fact we have a  high scoring dollar you don't tend to see that but   the reason is because of the french elections we  saw money coming out of the euro short covering   people booking profits in their long-term euro  positions ahead of the euro elections and then   money will start to come back in afterwards and  this is why i say that overall i'm bearish on   the euro but we really need to wait to see what  happens in the elections first and when we look   at the markets today there are two charts which  will allow us to play the outcome of that election   either way what we can also see here is we see  the japanese yen for the first time in a long   time coming off oversold levels this is a little  bit of a warning and the reason i don't like this   is because we've had such a big sell-off in the  end that if we start to get short covering rally   coming into the end that thing could snap  back very very strongly and so yes we could   see continued weakness in the end and in fact  fundamentally i'm bearish and we'll discuss the   reasons why when we talk about the yield curve  control going on in the japanese bond market   but this to me right here japanese yen coming off  oversold levels for the first time in many weeks   it tells me that the risk of a short covering  rally and that market snapping back in your face   if you try and short this has greatly increased  and this is all about risk and reward what we're   looking at here so when you combine that with  the fact we also have an interest rate decision   boj meeting next week i personally am not going to  be looking to trade the n pairs the next thing we   can see is the canadian dollar is still holding  up somewhat and this is because of the price of   crude oil price of crude oil remains quite strong  and this is supportive of the cad somewhat however   as a commodity currency if crude oil starts to  sell off to the downside this is going to tank the   cad and when we look at the individual currencies  you will see the cad itself is not that strong so   what this is saying is the cad is strong relative  to the japanese yen the swiss franc the pound etc   but when we look at the individual currencies you  will see the canadian dollar is not a very very   strong long and the final thing to note here is  the big move down in both the australian dollar   and somewhat to the downside in the new  zealand dollar in the scoring system   this is showing you once again that deflationary  risk off appetite coming into the market   and because although the australian dollar is plus  one which is kind of a bullish to neutral score   and the new zealand is zero which is a  neutral score although they are kind of   neutral currencies in the scorecard system the  momentum is showing a shift to the downside and i   am anticipating seeing the australian dollar  the new zealand dollar continuing their momentum   from the left-hand side of the scorecards to the  right-hand side so going into this week to cut a   long story short my absolute priority is us dollar  long positions this is where i think the money   is most likely going to be made next week i will  also be looking at some cad long positions because   relatively speaking the cad is stronger than  the other currencies however the cad in and   of itself is not a fantastic long which is why  my priority is us dollar longs and to the short   side i'm primarily going to be looking at those  two currencies vis-a-vis the australian dollar   because it's starting to make its way from left  to right across the scorecards here you can see   with the miners two last week and i think that's  going to continue this week i'm also going to be   looking to be short the new zealand dollar i will  also be looking potentially at short in the euro   but again we're going to wait to see what happens  with the french elections first we'll be looking   how we could trade that both ways and i also like  short the pound that is probably my favorite short   going into next week now you might say well why do  you prefer the pound over the frank over the end   well because if we see a continued sell-off and  we see stock markets in the u.s continue to crash   the frank yen and the japanese yen are safe haven  assets and they're likely to catch somewhat of   a bid so we need to apply a little bit of  nuance this week to the scorecards because   we have to factor in what's happening in the stock  markets and the scorecards themselves are showing   us with the yen coming off an oversold level that  this risk off appetite flight to safety is likely   to continue going into next week so to summarize  going into next week my absolute favorite pairs   are going to be aussie dollar to the downside  new zealand dollar to the downside pound dollar   to the downside and potentially euro dollar to the  downside depending on the outcome of the election   we can also look at some of the cad pairs relative  to some of these weaker currencies and especially   the new zealand cad because in a risk-off scenario  you would still expect to see the new zealand   selling off against the canadian dollar so  it's probably my favorite cad pair next week   and finally with everything going on the third  thing to take note of next week outside of the us   dollar and the catalon positions is the japanese  yen which i'm not going to be trading i'm going   to be avoiding next week okay so if we look at  the individual currencies and we start with the   us dollar we can see and we're looking in the  daily chart just to get an idea of the bigger   picture of what's happening in the individual  currencies we're making our way towards the   101.74 which was the target outlined for the  us dollar in last week's video and you can see   i mean the dollar is at its highs this is a very  very very strong currency individually speaking   now yes i know the dxy itself is relative  to other currencies i understand that but   we can take the index as a representation of  the individual strength compared to the relative   models that we use for the scorecards now one of  the big things propelling the dxy to the upside   is what's happening in the stock market this is  very very significant what we're looking at here   is the start potentially of a major crash in u.s  stocks now the reason why i don't use click bait   headlines i don't use alarmist language very  often is because when i say these things i   want to convey the fact that i truly see this  as potentially happening and in fact i spent   a lot of last year telling people the markets are  not crashing the markets are just correcting from   all-time highs this is not a crash but now the  markets really are at serious risk of a large   crash to the downside if we continue down lower in  the spx the moment this thing could really start   to snowball and start to turn into a major crash  is on a break below the 4114.65 and you can see  

we are coming down towards this at quite a bit of  speed and based on everything i'm seeing we are   going to come down and reach the 4114.65 this  would be a major failure of the trend in spx   and that is the exact level you could start to  see this turn into a major crash in stocks that is   going to propel the dxy to the upside you're going  to more than likely see the frank and the japanese   yen catching a bid even though they're both being  devalued by their respective central banks and   you're primarily going to see commodity currencies  such as the australian dollar and the new zealand   dollar suffering the most alongside the pound and  you'll also see the cad suffering in that scenario   if we have a look at the nasdaq you can see we  are approaching a major structural failure in this   market and that's at the 13020 if we come down and  break this level and we're very close to this this   is where we could see a major crash take place  in the nasdaq the dow jones last week completed a   double top reversal pattern in the daily chart and  again we are approaching a major structural level   three two two seven two point six four this is  the level if we break this and it looks like we're   going to come down at least test it this is where  we could see the market crashing to the downside   and a severe sell-off in the dow jones and in the  russell which i had highlighted for quite a long   time in previous weekly forex forecast videos we  broke down below the significant level of the two   one zero seven eighty i said that between here  this is kind of no man's land and we came back   and tried to break above this this was a test on  the underside of this key area of support turning   resistance and if we break the 1894.44 again the  russell another index which is at risk of a major   crash to the downside because that is a point  where we could really start to see a sell-off   accelerate to the downside so next is the euro and  the euro is down at the lows and i am bearish on   the euro if we see stock markets crashing in the  u.s if the u.s goes into a recession then you're   going to see that you go into recession you're  going to see china going into a recession which   already looks to be heading there anyway and  you are going to see the euro selling off in   that scenario so i am bearish on the euro but  we may see a gap up or we may see the market   rallying to the upside after the outcome of the  french elections which are taking place tomorrow   next is the pound we came down took out the target  last week at the 1.2857 look at the momentum to  

the downside here in the pound this is telling  us absolutely the chance of discontinuing the   downside next week are very high and this is why  the pound is probably my favorite short going into   next week next is the swiss franc we came and took  out the target set at the 1.0576 and we almost   took out the 1.0442 last week and the swiss franc  was the market i identified in last week's video   as the number one place to look to make money why  because i said the swiss franc is at risk of a big   sell-off and we could see very steep move to the  downside and this was my best short last week and   we did have a really nice sell-off continuation  of what we discussed in last week's video i am   still bearish on the swiss franc again the problem  is if the market crashes the swiss franc is going   to catch somewhat of a bid so what that means is  although i don't want to belong the swiss franc   i would much rather trade the dollar against  currencies like the pound like the new zealand   like the aussie all three of those suffer when  you see a crash in the stock market or you see   stocks selling off whereas the us dollar versus  the swiss franc we will look at it to the upside   but you kind of have two risk-off currencies  fighting each other so you're not potentially   going to get as much of an explosive move as you  may do versus you know pound dollar new zealand   aussie dollar but you can see here that the swiss  franc itself is not a strong buy next is japanese   yen and we took out these targets to the downside  now what's going on here in the japanese yen is   actually very serious and we could i'm sure  we're going to see some explosive moves coming   in the end when you see that whether to the  upside or the downside you're going to have   risk involved so if you're trading this  with tight stops you need to be very careful   if you are looking to trade the end i would  take wider stops maybe take a couple of weeks   atr or something okay so what is actually going  on here in the end well we're looking here at   the jgb 10-year yield and what's happening is the  bank of japan has a policy of yield curve control   and what this means is just like in the free  gmt course when we talk about currency pegs   it means they have a range in the benchmark  yield which is the 10-year and the range set   actually last year early last year was expanded  to 0.25 that means if the 10-year yield reaches   the upper bound of 0.25 the bank of japan buys  bonds because when demand for bonds goes up   the yield on the bond goes down so  when the yield reaches 0.25 percent the   bank of japan want to push this yield back down  and the way they do that is to buy bonds and this   increases the supply of the yen this is why  we're seeing a massive devaluation of the yen   and as the bank of japan are defending this upper  bound of 0.25 and they came out recently and said  

they're going to buy an unlimited number of bonds  in order to defend the upper bound of 0.25 percent   and this is why we're just seeing the yen collapse  now you might say well why would they bother doing   that well the problem is because they have a  lot of debt if the yield on the 10 year goes   higher than 0.25 or if it explodes to the upside  this is going to cause massive ramifications for   the corporate world in japan just reverberations  through the economy and it would be a huge shock   to the japanese economy because of the interest  payments that would be required in order to   service higher yields on the 10-year government  bond so they really have a choice they can either   allow yields to go higher and take the huge shock  to the japanese economy that that would entail   and by doing that they would actually  save the value of their currency because   they wouldn't need to buy bonds and they  wouldn't be increasing the supply of the yen   or what they can do is what they're currently  doing and they've stated they're going to do   is buy bonds at this upper bound in an unlimited  quantity massively the value in the japanese yen   but preventing the huge shock to the japanese  economy that would come from a spike in the   10-year yield and therefore the interest payments  that would need to be made on the 10-year yield   or derivatives of such because don't forget the  10-year yield is the benchmark now my word of   warning to you is this just because the bank  of japan are saying and my outlook on the yen   is fundamentally very bearish because of what's  happening here and the unlimited quantity of bonds   they are stating they're prepared to buy be very  careful with these situations thinking their free   money i remember very well professional traders  telling me that there was free money to be made   when the swiss national bank was defending the  euro peg or the swiss franc peg and it was euro   swiss franc 1.2 and every time the euro dipped to  this level the swiss national bank stepped in and   they would defend the peg and i had as i say very  experienced traders telling me they could just   buy the dip every time the market dropped because  the market would never go below the peg because it   was being defended by the swiss national bank and  these are people who should have known better and   they got wiped out because one day completely  unannounced the swiss national bank dropped   the pledge to defend the peg and we saw what  happened we had the swiss franc shock in 2015.   now i believe that the bank of japan are going  to continue to defend the upper bound and push   ahead with this policy of yield curve control but  just bear in mind if you are short the n and the   bank of japan for whatever reason decides that  they're going to save the value of their currency   instead of implementing yield curve control you  could see some swiss franc type moves in the   japanese yen and you can see the yen strengthen in  the same way we saw the swiss franc strengthen in   2015. that is my word of warning to you whenever  something in the markets looks like free money be   very wary because there's always risk attached  okay so finishing off the individual currencies   and moving on to the markets themselves look  at the cad second strongest scoring currency   this is where the scorecards are telling us  relative to all the other currencies this   is the second best buy and look at it it's  selling off to the downside it's crashing   this is another sign of a market crash when you're  seeing high scoring currencies relative to others   but they are themselves crashing the dollar  of course benefiting as safe haven asset   so yes i would be prepared to look at some cad  pairs you know vis-a-vis aussie new zealand etc   but just bear in mind this is not the best long  next week in my opinion the best long is the dxy   next is the aussie also crashing to the downside  as we finally see that stagflationary play coming   out and unwinding as people pull their money out  of the australian dollar and put it into the dxy   primarily here as a flight to safety so i do like  aussie shorts this week and last week we took out   the target in the new zealand and i have a high  conviction that we're coming down to the 0.65 280  

so i do like new zealand shorts next week okay  so looking at the markets themselves next week   starting with crude oil crude oil is currently  bullish and in fact we are forming somewhat of   an inverse head and shoulders i would normally  be looking for crude oil to be coming down we're   looking for a breakout here and a move up to the  one one 388 but because of what we're looking   at now in stocks the problem is if you see the  market in the us selling off the stock market hard   this is going to reduce demand for crude oil  you're going to see crude oil selling off so   because this is currently bullish but we have  that crash which could negatively affect crude   oil prices i'm not going to be trading crude  oil next week next is us dollar swiss franc   this was on my long list last week and  this was highlighted as a good move to   the upside we took out both targets i am still  bullish USDCHF and in market crashes you still   would expect to see the dollar outperforming the  swiss franc somewhat any pullback in this market   is viewed as an opportunity to look  for bullish setups into the 0.9638   this week because of what's happening in stocks  i do not have this as my one of my favorites and   it's because they're both risk-off currencies  so i am prioritizing the pairs think of it as   an additional filter over and above the scoring  system based on markets which you would expect to   perform in a market crash USDCHF you would see it  to the upside in a big crash but the moves might   be somewhat restricted because they're both safe  having assets moves impound dollar to the downside   moves in new zealand dollars to the downside moves  in aussie dollars to the downside would be bigger   than moves in us dollar swiss franc to the upside  in the event of a market crash next is GBPUSD we   took out the target set in last week's video at  the 1.2854 and that was pretty much the low of the   week in this market i mean look at GBPUSD this is  just a magnificent setup we've broken out of this   what looks to be somewhat of a descending triangle  pattern and so going into next week i absolutely   love this chart to the downside what i would like  to see is any pullback in this market is viewed as   an opportunity to look for short positions down to  the 1.2676 next is NZDUSD we took out both targets   to the downside in this market last week going  into this week again look at the momentum in this   market this is absolutely primed for further  declines any pullback in this area perhaps to   retest the previous low is going to be viewed  as an opportunity to look for bearish reversals   down to the 0.6539 next is AUDUSD the australian  dollar is the currency which performs the worst   if you see a market crash and again you can see  momentum to the downside any pullback in this area   look for a potential retest of the previous low  that would be a great place to start to look for   bearish setups and i'm going to be looking down  to next year of support 0.7158 i do think those  

three markets going into next week represent  the best opportunity to make money in forex   next is EURUSD now EURUSD is highlighted in blue  because i'm going to be looking to trade either   EURUSD or EURGBP potentially EURCAD as well but  only after we have the outcome of the election   next week now what we're likely to see in terms  of market moves and this is based off of prior   french elections it's not my opinion this is  just what we saw on prior french elections   is that if you see a macron victory you're likely  to see maybe a gap up or a rally to the upside   in the euro if you see a le pen victory you're  likely to see a gap down or a sell-off in the euro   so on the basis we get a weakening of the euro  on the outcome of the french elections i will be   looking at EURUSD short positions so what we might  see is if it gaps down say and we take out the   target first at the 1.0729 i'll be looking for a  pullback because we're quite close to this target   any pullback would be viewed as an opportunity  to look for shorts into the second kiev support   to the downside in this case at the 1.06 420. so  that's my first euro set up next week based on the   french elections and that would be on the basis of  a euro gap down or euro weakening now moving on to   the cad pairs because as i said i'm not looking to  trade the impairs personally next week and i think   they're best left alone we also have boj next  week as well last week we took out both targets   in cad frank any continued pullback in this  market we've already had a sell-off is simply   viewed as it currently stands as an opportunity  to look for bullish reversals into the 0.7636  

now although this scores quite highly in the  scorecard system the problem is in a market   crash you would likely see the cad underperform  the frank and this is why it's not highlighted as   one of my favorite pairs next week next is GBPCAD  now last week we took out the target set at the   1.6297 going into next week i am looking further  declines any pullback in this market is viewed as   an opportunity to look for sell positions into the  1.6197 again not highlighted in XAUUSD why because   in a market crash you would see the pound and  the cad they perform in a fairly similar way so   very often you just kind of get the market  chopping up and down kind of whip soaring because   neither of them really outperforms the other in  a market crash and really i want to be looking at   the markets which would outperform in a market  crash if that would continue next week so i do   like GBPCAD shorts but it's not highlighted as one  of my favorite next week next is NZDCAD we took   out the target set previously at 0.8509 we are  coming very close to the target so any pullback   before taking out the target would be viewed  as an opportunity to look for bearish reversals   into the 0.8406 although what's more likely to  happen is we probably come down take out and then  

correct in that case i'm going to be looking for  cell setup still but i'm going to be looking down   towards target 2 0.8343 this is highlighted as a  favorite pair next week because in a market crash   you see the new zealand dollar selling off against  the cad this pair would underperform in a market   crash just like GBPUSD new zealand and aussie  dollar which is why i've also highlighted this as   one of my favorite setups next is EURCAD now last  week i highlighted this as a good short and we   came down took out the target to the pip in this  market i am looking for the declines this pullback   is simply viewed as an opportunity to look for  bearish reversals back down into the 1.3523   once again now this setup very similar to EURUSD  would be on the basis of the euro weakening from   the results of the french election and perhaps you  get for example next week the market gapping down   coming back to fill the gap or it just sells  off and then you get the opportunity to go short   on continued euro weakness so it's a french  presidential election set up next week and the   final pair in my playbook next week is euro pound  to the upside this is of course based off of euro   strength so the opposite to euro dollar euro cad  and if we get euro strength perhaps we gap up or   we gap up and we pull back like this and then any  break higher any reversal in this market would be   viewed as the opportunity to look for further  long positions into the 0.8509 so EURUSD EURCAD  

to the downside based on EUR weakness EURGBP  to the upside is going to be my go-to chart to   look for opportunities in the euro if we get euro  strength off of the back of the election and the   final thing to note here in euro pound is this if  we come to the 0.8509 this is potentially a major   breakout in euro pound because why we have a huge  reversal pattern here at the bottom in fact i'm   going to zoom out even more for you you can see  in fact i'm gonna change this to a daily chart you   can see we have a major inverse head and shoulders  and what happens in a market crash to euro pound   we see explosive moves to the upside so  this is another confirmation especially   if we come up and take out the 0.8509 that a  much larger risk-off move is in the works here   i'm finishing off with XAUUSD XAGUSD and bitcoin  starting with XAUUSD now XAUUSD is actually   structured to the upside but the problem is if the  market starts crash gold suffers because people   liquidate gold positions and positions in precious  metals in order to cover their margin and so   although this is structured to the upside i would  be short on XAGUSD and XAUUSD going into next week   because we have a the dollar strengthening which  is a headwind for these precious metals plus if   the markets crash you could see people liquidating  their positions which of course is bearish   for gold and silver so going into next week i  personally would leave XAUUSD next is XAGUSD now   XAGUSD is structured to the downside so if we are  going to get to sell off i'd rather short XAGUSD   than XAUUSD any pullback in this market is viewed  as an opportunity to look for bearish reversals   into the 23.72 i've highlighted this as one of my  favorite plays heading into next week and last but   not least we have bitcoin now in last week's video  i was looking further declines into the 38 000   level roughly 38.003 we have sold off towards this  level we haven't reached it yet so any pullback   is viewed as another opportunity to look for short  positions into the three eight zero zero three   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 big thank to everybody who   does that on a regular basis and a big thank 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 the markets next week   the only thing left to say is take  care and don't forget to trade safely

2022-04-24 22:55

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