EUR/USD
The euro initially fell during trading on Friday but turned around after the speech in Jackson Hole by Jerome Powell suggested that perhaps the United States was open to the idea of cutting rates. This of course has been very negative for the US dollar, but at this point in time it’s worth noting that it basically has made the weekly candlestick unchanged. There is still a double top at the 1.18 level, with significant support at the 1.16 level. Next week will be crucial but it is worth noting that not a lot has changed yet.
GBP/USD
The British pound initially fell as well but turned around to show signs of life as we are closing near the 1.3550 level, an area that has been resistance previously, and if we can break above there, the market could go looking to the 1.3750 level. If the market does pull back from here, there are plenty of areas where buyers could get involved, especially near the 1.34 level, and then the 1.3750 level. If we were to break down below all of that, the British pound of course would be in serious trouble. At this point, I think we are going to continue to see volatility more than anything else, but it does seem like we are going to “lean to the upside.”
USD/CAD
The US dollar rallied a bit during the week, but after the speech by Jerome Powell, it has given back quite a bit of the gains. However, over the longer term it still is very likely that we will see the Canadian dollar continue to struggle. After all, the Canadian economy itself is going to continue to struggle, and of course if the US economy does in fact start to struggle, this will have a direct influence on the Canadian economy as 20% of its GDP is based on exports to the United States.
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Bitcoin
Bitcoin plunged during the beginning of the week but has found enough support near the $112,000 level to turn things around and show signs of strength again. We are forming a bit of a hammer, but it’s interesting that the previous weekly candlestick is a shooting star, and I think at this point we probably continue to go sideways. If we can break above the top of the candlestick from the previous week, then it’s likely that the bitcoin market could go much higher. Expect volatility more than anything else.
NASDAQ 100
The NASDAQ 100 has fallen rather significantly during the trading week, to fall all the way back to the previous uptrend line, but turned around quite viciously on Friday as the speech by Jerome Powell at Jackson Hole has traders believing that the Federal Reserve is likely to start cutting rates, but the question at this point in time is that sometimes when rates start to be cut, it’s a sign that the economy is in significant trouble. I expect volatility, but it’s likely that we will continue to see this market squeeze higher.
Gold
Gold initially fell during the week but then turned around to show signs of life to the upside, especially as the market is now starting to bet that the Federal Reserve is probably going to cut interest rates twice between now and the end of the year. If that is in fact going to be the case, this might end up being the catalyst for gold to go much higher. We have 2 different things going on at the same time, mainly the expectations of a weaker US dollar, but at the same time, we have to worry about whether or not the economy is struggling. Both of those could be good for gold.
USD/CHF
The US dollar initially tried to rally for the week but found enough resistance near the 0.81 level to turn things around and show signs of hesitation. The market is now looking to break down below the 0.80 level but has not yet. If the market were to break down below there, then it could open up the possibility of a move down to the 0.79 level, where we had bounce from previously. I think the Swiss franc could be ran to as a safety currency, so this move so far has made quite a bit of sense. Whether or not we can continue to go lower remains to be seen.
DAX
The German index has been back and forth during the course of the trading week, as we are looking at the €24,500 level as a major barrier. If we were to break above there, then we could open up the possibility of the DAX going to the €25,000 level. Short-term pullbacks at this point in time should end up offering buying opportunities for people to take advantage of the longer-term trend. There is massive support near the €24,000 level, and then the €23,500 level below there.
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