Weekly Forex Forecast (25/07/22) EurUsd / XauUsd + Forex Trading Plan! [HD]

hey traders it's john fortune here with this  week's weekly forex forecast i hope you're   having a great weekend as always next week is a  huge week in the markets we have fomc next week   followed by second quarter u.s gdp the following  day those events are going to dominate what   happens in the market next week and in today's  video i'm going to share with you what i expect   from those events and how i expect those events  to affect the markets next week okay so a quick   look at the economic calendar and starting with  what we saw last week because this is important as   well we also had the eu interest rate decision and  that came out on thursday and for those of you who   watched last saturday's video the plan for last  week was risk on moves on the assumption that we   were likely to see a correction in the dollar and  if we're going to have a look at the charts from   last week you can see from the 18th which is when  we started the week we did have one two three four   and we ended up five down days in the us dollar  and because of that we did have into the ecb   meeting a number of risk on setups playing out for  example if we look at new zealand yen which we saw   from the 18th we had a big rally to the upside  and then when we had the ecb rate hike itself   we saw the market discount that news and sell off  if we have a look at cad yen which was another   market we looked at last week we had the rally  into the ecb meeting and then on the 21st we had   the big sell-off as the market discounted the rate  hike and for those of you who have done the free   gmt course we do have a section in there about  how the market acts as a discounting mechanism   and the reason we're looking at this this morning  is because when you have these interest rate   decisions the market reacts in a certain way and  i do expect to see similar behavior although not   exactly the same leading into fomc and into the  gdp data next week i'm going to cover that as i   said in today's video and the final important  thing to note from last week were the pmis   on friday out of france germany the uk and the  us we had contractionary recession readings   in french manufacturing below 50 in german  manufacturing and services and we also had it in   the services sector of the us coming out 47.0  these are very important we don't cover them in   the weekly forex forecast purely because they're  not very essential for short-term trading but they   are important pieces of data to keep an eye on and  last week as i said we had recessionary readings   from a number of these pmis and in the us don't  forget the services sector is the largest sector   so heading into this week and this is where we  start to put the pieces of the puzzle together   we do have fomc on wednesday and also advanced  gdp on thursday these are likely to dominate   the market behavior next week and the markets  when we go through the markets i'm going to show   you what i think we're going to see but they're  unlikely to do much between monday and wednesday   and then we're probably going to start see  the moves from wednesday or thursday onwards   and i do believe that what comes out on wednesday  and thursday could very well catalyze the next leg   down in stocks which would of course send the dxy  higher and i do think any of the next sell-offs   in the stock market could actually result in  capitulation so a panic selling that we usually   see at the bottom of bear markets bear markets  don't usually turn and we are in a bear market   now in stocks bear markets don't usually turn  without capitulation and without a strong sell-off   where there's panic and fear and then the markets  tend to bottom so there is a big risk that what   comes out of fomc next week or if we get a second  negative reading of gdp and you might be looking   to say well why would we have a second negative  quarter of gdp because yes we had previously   minus 1.6 but it's forecast here at 0.4 so we're  being forecast here in the economic calendar that   the us is just going to avoid a recession well the  problem with that is if we go to the atlanta fed   gdp now forecast and this tracks and monitors gdp  gives a forecast to gdp essentially in real time   you can see the last estimate before this  next print was minus 1.6 so the atlanta fed   are telling you that the u.s has probably been in  a recession for six months and now we're getting   services pmis coming out telling you that sector  is contracting and i expect manufacturing pmis   to follow very very soon and so going back to the  economic calendar the chances are we actually see   a miss here and we see a second negative reading  of gdp confirming the us in a technical recession   and if that is the case i would expect risk  off moves to come into the market i would   expect the swiss franc the us dollar and also  the japanese yen to snap back in that scenario   and as i said i do believe that either one of  these events next week could catalyze the next   big leg down in stocks so a very very important  week coming up next week okay so let's have a   look at the score cards heading to next week and  the first thing to note is that the score cards   in interest rate decision weeks have to be used  in conjunction with what the general picture is   around the interest rate decision because this is  why we look at them in the economic calendar they   have the ability to change trends to completely  reverse markets and so you can go in with a   probability score which can be completely changed  on the event itself so the interest rate decision   and gdp data next week does take precedent and  because i believe there's a good chance of a   second negative quarter of gdp based on what  the atlanta fed is projecting and we're going   to see a miss very likely in gdp which is going to  surprise a number of market participants who are   expecting as you saw forecast in the economic  calendar for the us to just just miss a recession   and if we get that second negative quarter of  gdp all of those people are going to scramble   to get out they're going to say okay we made  a mistake the u.s is already in a recession  

and that is when you're likely to see a  risk-off move coming into the markets so   starting from the top down with my expectation of  a risk off move being the higher probability play   and what i want to focus on next week we can  then go down to use the scorecards to allow us   to drill down into exactly what risk of setups  we might want to look at okay so in terms of   setups and markets next week if we do get a second  negative reading of gdp out of the us confirming   not just that a recession is on the horizon for  the us but the us is in a recession right now   and because of that we see a risk-off move in  the markets i am going to favor the safe haven   assets to the upside that's the swiss rank the us  dollar and the japanese yen but here's where the   scorecards help us because yes although the yen  would outperform in a risk-off environment i would   prefer to belong the us dollar and the swiss franc  in that scenario because they both have a better   month forward looking probability score than the  japanese yen so what this tells me is yes i want   to be long risk off currencies next week if we get  that second negative print of gdp but i don't want   to be long the yen as it currently stands there  will come a time to be long the yen once again   i don't think now is that time but it does mean at  the very least i don't want to be short the end so   i'm not going to be looking at frank yen and i'm  not going to be looking at us dollar yen because   then you're just trading multiple safe haven  assets against each other what i would like to do   next week is reflect that bias of risk off in euro  dollar to the downside euro franc to the downside   going to be looking at pound dollar to the  downside also pound frank to the downside   which we looked at last week and i'm in fact  already short and we're also going to be looking   because the new zealand and the canadian dollar  commodity currencies and they're only scoring   bullish to neutral they're kind of neutral in  a risk-off scenario i do think we see these two   markets or currencies selling off and so i am  also going to be interested in new zealand to the   downside i'm going to be interested in new zealand  frank to the downside and we can also look at us   dollar cad and cad frank as well the australian  dollar in a risk off scenario would also suffer   however as you can currently see the scorecards  are just saying to wait on the aussie perhaps   that's a trade for next week i.e aussie shorts  the final thing to note is that if the atlanta fed   is wrong and the economists on the economic hand  are correct which i think is unlikely but if that   is the case then you are not going to see risk  off moves in the market if you in fact see the us   avoiding a recession next week with a non-negative  or positive i say non-negative because it might   just be zero percent it doesn't have to be  positive but if it doesn't show a contractionary   reading next week then you would likely see a  relief rally in stocks and also that would be   reflected in the currency markets you would  see the safe haven assets like the frank like   the us dollar unlike the yen probably selling  off instead of rallying which is the base case   that i'm going into next week with so it's very  important to bear that in mind next week okay so   let's have a look at the individual currencies  here and starting with the dxys we always do   on the daily chart to look at the bigger  picture the dxy is the only currency still   in an overall bull market and very similar  to what was discussed earlier with stocks   if the stock market is likely to bottom as is  usually the case with capitulation panic selling   then that would be reflected the opposite in the  dollar this ball run in the dollar would come to   an end with one final blow off top and that's what  you need to be looking out for that's what i think   especially if we get a second negative quarter of  gdp i think that actually wouldn't be too far away   so we took out the previous target the 108.73 i  am now looking for the dxy to rally into new highs   and the 109.76 is the next key of resistance the  upside next is the euro we're really just forming   a bear flag here this is actually a continuation  pattern and when you factor that in with what   we've discussed with a potential risk-off move  coming on a miss of gdp second negative quarter   that would see the euro selling off and we are  still below the 1.06710 which is the multi-year   breakout the euro is not going to reverse into a  bull market unless it can at least come back above   that so i am looking for the declines in the euro  the pound is lacking a little bit of momentum here   but again that can all change next week if we get  either it doesn't have to be from the gdp it could   be from what happens on so you've got those two  events back to back so either on fomc or gdp we   could see a risk-off move coming and i am looking  for the declines in the pound the swiss franc is   currently structured to the upside but it's kind  of choppy if you were to look at this although   in the scorecards it has a probability score of  three which is telling you to look to the upside   over and above even a number of the other  currencies technically it's still kind of just   lacking a little bit of momentum we could see  a breakout to the upside usually the scorecards   precede moves in the markets so i am bullish on  the swiss franc but it's not in a bull market as   the dxy is the japanese yen and this goes back to  what i was saying when we looked at the scorecards   it is overall in a bear market this tiny bounce  to the upside yes it could be the start of a   short covering rally but i'm really only going  to want to be buying yen if we start to see the   market breaking back up especially really if it  can break above the 0.0079450 that would be the   time to start looking at yen longs so what if you  missed the initial rally if it comes back over in   this area not next week because this is a daily  chart might take a couple of months to do this   if it did but if it does that that would be the  time to start looking to buy yen so at the moment   really i'm just avoiding yen shorts but i  don't want to be a buyer of yen just yet   next is the cad the cat is just grinding to  the downside we don't really have any momentum   but we do have lower lows and lower highs so i  am kind of bearish to neutral on the canadian   dollar based on what i'm seeing here technically  speaking however in the scorecards it's bullish to   neutral so really just neutral on the cad this  would sell off in a risk-off event next week   and that is why i'm going to be looking at say cad  frank to the downside as a market i'm interested   in next week next is the aussie we just missed  the target previously at the 0.6685 by just a  

pip or a couple of pips and as it currently  stands i'm viewing this just as a correction   when we go through the charts themselves you'll  see what i think we're going to see next week is   just as we saw with the ecb the market rallied  into the ecb and then it reversed i think we're   likely to see the opposite i think you're going  to see some buying coming in from people who are   expecting the us to skirt a recession and then  if we get that second negative quarter of gdp or   on f1c even then i think what we're going to see  is that's when you'll see the first risk off move   and the opportunity will be to enter after the  event you don't have to jump in before the event   and have this thing fly in your face but after the  event is where i'm going to primarily look to be   positioning down for the next move to the 0.6685  and of course that would be reflected in pretty   much all of the currencies here and finally the  new zealand dollar again this is really just in a   bear market and i'm viewing this as a near-term  correction any continued pullback i am viewing   as an opportunity on the either interest rate  decision or the gdp data if we start to break out   four shorts to the downside okay so let's look at  the markets themselves starting with crude oil i   am bearish on crude oil i've been bearish on crude  oil pretty much since june the 30th when i tweeted   out that crude oil had likely now topped and is  starting to roll over we are down over 10 since i   tweeted that and i am still bearish on crude oil  next week any pullback in this market is simply   viewed as an opportunity once again to look for  bearish setups into the next care of support to   the downside the 89.3 the first forex market we're  looking at here is euro franc and of course we're   looking at risk off moves reflected in the swiss  franc pairs euro frank and pam frank are my two   favorite because they are the weakest in the  scorecards in terms of a one-month probability   score so eurofranc is my number one currency pair  going into next week outside of the dollar pairs   because they will be news trades any pullback in  euro franc is viewed as an opportunity to start   to look for shorts into the 0.9775 and if we break  through here onto the 0.9651 next is pound frank   this was a market we were looking at to be short  last week i am already short this from last week   and i'm holding over the weekend looking further  declines into the 1.1496 if you're not already  

short from last week any pullback in this area  would be another opportunity to look for bearish   breakouts into the 1.1496 and if we break through  here and this is one of the things i want to hold   short pound frank for is if we break through  the 1.1496 i want to see if we come down here   with speed because there is nothing but air  as i mentioned in last week's video between   these levels and when you have such a big air  pocket like this almost the market can cover   this ground in a very short period of time so  i'm looking for the declines pam frank is one   of my top currency pairs heading into next week  next is cad frank cad frank has some really nice   momentum so i like this chart going into next  week possibly even could put this in gold but   any pullback in this market is simply viewed as  an opportunity to look for shorts into the 0.7364   next is new zealand frank and again you could  probably put this in gold alongside euro and   pound they're only highlighted in gold again  as i said because they are the weakest in the   probability scores but the cad and the new zealand  are likely to sell off especially in a risk-off   event these two actually might outperform the top  two so i am interested in looking at these as well   you can see here we're breaking out of a big  bear flag really big sell-off and it requires   a longer correctional pause and if we start to  break down especially if we can come down with   momentum like this any pullback is simply viewed  as an opportunity to further declines into the   0.5798 next is euro dollar way way way below the  multi-year breakout of the 1.06359 and this thing   has pulled back towards it and just started to  sell off and now we've got this big bear flag   what i'm looking for next week is look for price  to run up into fomc gdp and on one of these events   i'm looking for the market to then sell off like  this and that will provide the opportunity to   look for short setups into the 0.9927 as i said  if the atlanta fed is wrong and we do not get   a second negative quarter of gdp i would expect  a relief rally and we may even come back and   test the 1.06359 so if you want to be extra  cautious you don't want this to fly in your face  

and find out actually the atlanta fed gdp as  unlikely as it is turns out to be wrong then   the best thing to do is to wait till after the  event between monday and wednesday the markets   are unlikely to do very much anyway so you're not  in all probability going to be missing out on much   so that's what i'm looking for in euro dollar and  this will be the number one pair that i'm going to   go to once we get those events on first of all  wednesday and then on thursday i would suggest   when you are or if you are trading these markets  to take wider stops because next week is likely to   be volatile next is pound dollar really didn't do  much last week because the dollar just corrected   but again what we're looking at here and you might  say okay but we have an inverse head and shoulders   here which is a reversal pattern that's great but  inverse head and shoulders are better in uptrends   because then you can continue the trend this is  essentially trying to pick the bottom and what i   suspect is going to happen is this is going to  come in sucking buyers and then if we get that   second negative quarter of gdp or on the hike  itself because don't forget we're going to see   a hike of i would imagine 75 basis points next  week that's when i expect to see the risk-off move   take place and that would be your opportunity post  event to look for further declines into the 1.1715   new zealand dollar market is correcting and  unlikely to do anything between monday and   wednesday i imagine this is probably just  going to continue to correct and then again   on wednesday or thursday depending what happens  on wednesday if nothing much happens on wednesday   it would be thursday but i'm looking for a big  sell-off like this for this trend to continue   and when we get that catalyst that initial  catalyst i'm going to be looking for any pullback   in this area for further declines down to the zero  point at six zero one five and the final risk off   setup that i'm looking at in terms of the dollar  pairs in this case is us dollar cad if we get a   sell-off in crude oil on a risk-off move you're  going to see dollar cad rallying to the upside   i wouldn't be surprised to see the market  come down perhaps and bounce off the low   at the beginning of the week monday tuesday  wednesday and then get a breakout like this   from wednesday or thursday that would be the  opportunity to look for long positions i'm going   to be looking back up to the previous high and the  previous resistance the 1.3203 so those are the   markets that i'm going to be looking at in forex  next week they are all risk off setups and they   are all based around the atlanta fed being correct  and us getting a second negative quarter of gdp   but just bear in mind the actual catalyst  might come on fomc the night before   okay so wrapping up this gold silver and bitcoin  starting with the gold silver ratio you can see   the gold silver ratio is still moving to  the upside the 95 handle is the next care   of resistance last week gold for the first time  in a while did actually slightly underperform   silver because we had a bit of a sell-off but  you know if you get gold under-performing silver   one week out of eight then of course you still  want to be overweight on silver shorts rather than   gold so i am bearish on both gold and silver but  i still favor silver shorts over gold shorts but   i'm bearish on both next is gold last week i was  looking further declines in gold and look at where   gold turns 168 2.30 almost to the point and that  was the reversal short covering rally as profit   taking came in in gold going into this week if  we're going to get risk off moves this is going   to see further declines in gold we came up here  with momentum which tells me we're probably going   to do this monday into wednesday and then  i'm going to be looking for the breakdown   as we get if we get a risk off move you see the  dollar rallying this is going to push gold further   to the downside and that would be the opportunity  to start to look for shorts down to the 16 33.70  

someone was asking me do i think gold has bottomed  i do not think gold has bottomed and until   we start to see the dollar topping out and that's  likely to come probably after a capitulation   and a blow off top in the dollar most likely  then i think you're going to see gold bottom   and when the fed starts to print money once again  as it will inevitably do that is when you'll   probably see the bottom in gold and you're going  to see a very strong rally in gold and the dollar   roll over that is not now i think between now and  then we still have a final capitulation next is   silver last week i was looking for shorts in  silver and i did actually short silver up in   this area on the pullback and i am looking for the  declines this week we may just continue to correct   going into fomc any pullback is still viewed as  an opportunity to look for shorts into the 17.63   yes gold actually underperformed silver last week  i think silva goes back to under performing gold   this week and last but not least we have bitcoin  again what happens when you have a big move like   this in the markets the correction tends to be  the same you have a big correction the market is   not going to do a huge move tiny correction huge  move tiny correction you have a big move you have   a bigger correction i still view this just simply  as a big bear flag i am looking for bitcoin to   come up and i wouldn't be surprised to see bitcoin  come up and double top into fomc gdp and then that   would be the opportunity to look for shorts if  you want to be extra cautious after the event   itself say we sell off we break the double top  and then we start to pull back that would be   the opportunity to look further declines down  to the 16 492 perhaps you get that thursday   friday perhaps you only get that at the start  of next week it really depends on what happens   this week with fomc and gdp 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 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 your trading next week the only thing left to  say is take care and don't forget to trade safely

2022-07-24 20:47

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