In the latest Forex Weekly Outlook, we see markets that finally have a slower week. The IDX has turned around to show some bullish bias as we see how that turnaround will affect the rest of the major pairs.
Forex and the U.S. Dollar
The U.S. Dollar Index saw a positive week as we turned to February after a close of 100.791. We see a potential trend line break as Friday’s bar closed above the resistance line. Our key VantagePoint level for this week will be 100.442. All of the predicted difference indicators are bullish and the neural index is in the “one” position.
Intermarket relationships are always key when trading Forex. It’s extremely important to understand these relationships so that you can use them as leading indicators for other markets. Remember, intermarket relationships will traditionally overpower any indicators.
Forex Weekly Outlook for Major Pairs
Forex pairs are highly influenced by the global equities and understanding the relationships will almost certainly add to your success as a Forex trader.
Euro/U.S. Dollar (EUR/USD) had a down week as gold pulled it down to a 1.0639 close. The key level for the upcoming week is 1.0686. We saw a dip below the support line and the indicators suggest we could see some bearish momentum in the short term. If we break below 1.0600 we could see a larger bearish move.
U.S. Dollar/Swiss Franc (USD/CHF) had a very light triple EMA cross last week as this pair closed at 1.0020. The predicted differences appear bullish this week. The RSI has also broken through the 60 level and sits at 65.7 as we start the week. The key level for this week is 0.9998. If this level holds through the first part of the week, we can start to consider some more long term bullish strength.
British Pound/U.S. Dollar (GBP/USD) comes into this week off of a mostly sideways week that closed at 1.2485. We did see a push down to the support line last week, but a quick rebound negated that move. Our key level for the upcoming week will be 1.2481. We see signs of bearish bias, but it may be weakening.
U.S. Dollar/Japanese Yen (USD/JPY) repeatedly tested the support line around the 111.80 area last week. It never broke through but remains a highly focused area as we come into this week. The key VantagePoint level for the week is 113.37 following an 113.15 close. The medium-term difference did cross the long-term to the upside which suggests any bullishness could be fading. The RSI has also run flat at 52.4.
The Commodities Currencies
U.S. Dollar/Canadian Dollar (USD/CAD) saw the formation of a new resistance trend line coming in around the 1.3150 area. The pair closed last week at 1.3081 and enters this week with a key area of 1.3138. The predicted differences have turned bearish, as has the neural index. The RSI, which flirted with the 60 level last week, has also collapsed to a 43.7 level.
Australian Dollar/U.S. Dollar (AUD/USD) shows significant trend line resistance around the 0.7700 level. While this is an important area, we should also keep an eye along the VantagePoint EMA. This pair has tested that line multiple times in the last few weeks. So the key level for the week of 0.7580 could be a very active position. Keep an eye on the closely correlated gold markets as an indicator of what this pair could do this week.
New Zealand Dollar/U.S. Dollar (NZD/USD) took some heat after the dovish remarks coming out of the Bank of New Zealand. That led to a down week and a close of 0.7198. The pair comes into this week with a key level of 0.7227. Just like the Aussie, this pair will have a lot of focus on gold this week.
The Forex Weekly Outlook is designed to help traders remain aware of the intermarket correlations of these global market relationships. You can become more profitable if you know how to get ahead of the trends and understand these relationships can potentially expand your portfolio.