EUR/USD
The euro has been all over the place during the previous week, but the thing that the weekly chart does not show you is that we had a pretty tough pullback during the Friday session, perhaps suggesting that we are in the midst of breaking down through a somewhat significant trend line, and have just confirmed that breakdown. With this, the market could be worth watching as to how the US dollar could behave.
USD/MXN
The US dollar rallied against the Mexican peso during the week but continues to see a bit of trouble. This market has a major downtrend line that it’s been fighting with, and that downtrend line continues to offer a bit of a headache for US dollar bulls. Keep in mind that it’s also at the 18.5 MXN level, so that is a large, round, psychologically significant figure that is also backed up by the 50 Day EMA on the daily chart, suggesting that we will continue to see more of a “fade the rally” type of marketplace here. Keep in mind that the interest rate differential continues to favor the Mexican peso, and therefore, it adds more credence to the downtrend.
USD/CAD
The US dollar has rallied against the Canadian dollar during the bulk of the week but gave back gains as it looks like the area above the 1.40 level continues to be a bit of resistance. Nonetheless, this is a market that I think sooner or later will continue to see buyers jump back into the market, even though there has been a bit of pushback. If we can break above the top of the candlestick for the week, then we could see a move to the 1.4250 level. This is a market that will be noisy, but I do think it will eventually go to much higher levels. The market continues to punish the Canadian dollar for the week's economic performance coming out of Canada.
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USD/JPY
The US dollar initially rallied against the Japanese yen during the trading week but has fallen rather significantly. That being said, it also looks like on Friday the buyers came back into the market to perhaps trying to support the US dollar against the Japanese yen, which of course, will have weakness going forward since the Bank of Japan will probably have to keep its monetary policy somewhat loose, and the recent Japanese election suggests that loose monetary policy will be the way going forward.
Gold
Gold has seen quite a lot of explosive moves over the week, as we have broken above the $4200 level, but it looks like we are pulling back a bit heading into the weekend. Ultimately, this is a market that I think will continue to attract buyers on dips, but we have gotten so far ahead of ourselves that a bit of a pullback makes quite a bit of sense. While I am not bearish in this market, I do recognize that we have moved too quickly to the upside, and it does make a certain amount of sense that we need to find value to start buying again.
Silver
Silver markets continue to see a lot of noisy behavior, with the market slamming through the top of a shooting star from the previous week and breaking out above the $50 level, only to turn around and show signs of weakness. That being said, I don’t think silver is a market that you can be a seller of either, and as we are closing just above the $50 level, it suggests that we could have a volatile couple of weeks going forward, and I do think that short-term pullbacks will continue to be an opportunity to buy a “cheap silver”, but we probably need some type of vicious pullback to offer enough value to really pour money into this market.
Crude Oil
The crude oil market initially tried to rally during the week, only to plunge from the $60 level. The market falling the way it has suggests to me that this is a market that is at least trying to find some type of floor, just above the $55 level. A rally at this juncture could open up the possibility of a retest of the $60 level, but crude oil is telling us that it just doesn’t have any momentum to the upside, and it makes a certain amount of sense that the market will continue to be more or less a “fade the rally” type of situation.
NASDAQ 100
The NASDAQ 100 has been very noisy over the last couple of weeks, but it looks like the one thing that comes into play more than anything else is the 25,000 level. The 25,000 level is a large, round, psychologically significant figure that you must pay attention to, but if we can break above there, then it’s likely that the NASDAQ 100 will end up being very strong. In the short term, if we get a little bit of a pullback, then I think value hunters will come back in and try to pick up “cheap contracts.”
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