In the latest Forex Weekly Outlook, we look at the effects of a bullish week for the IDX. There seems to be some volatility in the pairs this week as a majority of our analysis show indicators that can be conflicting. This only strengthens the idea of having an understanding of how the markets are correlated and how the movements of intermarkets can better forecast the movement of these major pairs.
Forex and the U.S. Dollar
The U.S. Dollar Index ended last week on a bullish note, but the indicators for the upcoming week are somewhat mixed. After closing last week at 100.951, we come into this week with a key VantagePoint level of 100.643. We see a new support trend line forming around the 101.800 area. We also see a bearish crossover of the medium-term difference to the long-term difference. However, we also see a neural index at a “one” and an RSI moving higher and sitting at 55.1.
Forex Weekly Outlook for Major Pairs
Euro/U.S. Dollar (EUR/USD) had a nice recovery midweek before a bearish Friday closed the week at 1.0613. The key level for this week will be 1.0650. We see a bearish medium-term crossover that coincides with a neural index in the “one” position. The one point of caution is the RSI sitting at 35.4. Breaking above the VantagePoint level will be key to long-term bullish support.
U.S. Dollar/Swiss Franc (USD/CHF) tried to break through the resistance line around the 1.01 level but failed before closing the week at 1.0023. We also saw a bearish medium-term crossover coincide with the failed breakthrough. The key level for this week is 1.0015.
British Pound/U.S. Dollar (GBP/USD) sees a pool of indicators suggesting a bearish move could be in store this week. The predicted differences are all below the zero line and pointing down, the neural index is in the “zero” position and the RSI is coming in at 37.4. After we closed last week at 1.2406, we enter this week with a key VantagePoint level of 1.2473.
U.S. Dollar/Japanese Yen (USD/JPY) has entered a narrow trading channel that has tested both extremes in the last few weeks. We saw a quadruple test of the support line two weeks ago around the 111.50 area that bounced back and led to a test of the resistance line around the 115.00 area last week. The pair closed last week at 112.77 and enters this week with a key VantagePoint level of 113.46. The predicted differences appear bearish and the RSI is sitting just outside of the bearish momentum level at 41.
The Commodities Currencies
U.S. Dollar/Canadian Dollar (USD/CAD) has been trading along the resistance line for nearly two weeks. We closed last week at 1.3092 and enter this week with a key level of 1.3113. While our indicators don’t suggest any clear momentum, we do see bias for the bulls. The RSI came off the lower 40 level to sit at 51.8 We also have the MACD showing the slightest break of the trigger as it sits below the zero line. Our strength and neural index indicators are also both pointing up.
Australian Dollar/U.S. Dollar (AUD/USD) continued the bullish trend that has been in play since we turned the calendar to 2017. A bearish Friday closed the week at 0.7660 and we enter this week with a key VantagePoint level of 0.7617. The indicators suggest we could see a corrective move soon. The predictive differences are down, the MACD is flat and the RSI fell below the 60 level to 52.8.
New Zealand Dollar/U.S. Dollar (NZD/USD) saw a choppy week end on a bearish note. The pair closed at 0.7179 and comes into this week with a key level of 0.7208. Indicators suggest we could see more bearish action this week. The MACD continues to fall closer to the zero line and the RSI fell below the 40 line again to 38.3. The only bright spot is a bullish medium-term crossover.
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. Utilizing predictive indicators and intermarket relationships in VantagePoint Intermarket Software can help traders find the right trades and the right time to enter and exit those trades.