IYF3rd - 7th June 2019

Market Watchlist:

Hello Trader’s!

Welcome back to another week in the financial markets! I hope everyone had a brilliant weekend?

A new month is here and we have a busy week ahead!

May seems to be the month where the market created new direction across a large majority of currency pairs (especially xxxJPY pairs) as we saw a heavy flow of liquidity into the safe-havens (GOLD, JPY, CHF) due to Trump’s trade deal talks. During times of uncertainty we usually see investors remove their capital from USD, GBP, EUR and into safe-haven assets like GOLD, the Japanese Yen & the Swiss Franc.

Although a lot of these moves caught quite a few retail traders off-guard we just need to focus on the new information provided and now ride the new wave of direction and capitalise from this.

I would encourage everyone to take note of the most recent monthly candle closure’s. Every candlestick tells a story and we can obtain a lot of information from each monthly closure and use this as a good indicator for the moves that are potentially going to unfold over the next few weeks going forward.

Let’s have a great week, a great month and hopefully all catch a nice amount of pips together!

Please take a look at the ‘Forex Factory’ economic calendar below, fundamentals to watch out for include;

Monday: USD (Manufacturing) Data

Tuesday: AUD - BIG DAY! Retail Sales, Cash Rate, RBA Statement!

Wednesday: AUD GDP Data

Thursday: USD (Non-Manufacturing) Data, EUR ECB Press Conference, CAD Trade Balance

Friday: CAD Employment & Unemployment Data, USD NFP!

IYF

DXY (Dollar Index)

Monthly - Price action decelerating & printing a monthly doji candle having closed below 98.00 yet again. Due to the heavily bearish Weekly closure I’m not convinced that we will see the level of 99.00 hit now. However, as thing’s usually happen in ‘three’s’ - we may see one last drive into the level of 98.00- 98.50 before rolling over.

Daily - Friday’s (end of week/end of month) heavily bearish Marabozou candle was off the back of the safe-haven buying I mention at the beginning of this article. As we did close below 97.75 I will now be monitoring price for a clean break below the supporting inner trend line to confirm the next move. If we fail to break below this trend line then we could see one last drive into the high’s as mentioned above.

IYF

GOLD

Monthly - Quite simply we have enough information to now look for some decent buying opportunities on this commodity. Two monthly rejections of 1280.00 followed by a monthly close above 1300.00 is enough evidence to support going long moving forward.

Daily - Buying on any potential pullback should give us a nice risk/reward with our long term upside targets set at the next key level of 1350.00 which has acted as strong resistance time and time again. Take note above with the Monthly chart we have failed to close above this level with conviction on multiple occasions.

IYF

EURUSD

Monthly - With the DXY showing signs of exhaustion we can also see how this pair is decelerating at the same time. With price currently hovering around 61.8% Fibonacci level this could be the early indication that price is going to start pushing higher from here. The upside potential is huge with this pair so we need to wait patiently for the correct confirmation before jumping in long.

Daily - Buying confirmation for me would be a break above this counter trend line. Notice how price failed to make a new low and found daily support (triple bottom).

IYFEURAUD

Daily - As expected following from last weeks analysis we saw a further push to the downside. Price action is still looking good for continued selling with the bears in control. Please note we have the RBA rate statement tomorrow (Tuesday 4th June) and I am expecting AUD strength combining my technical and fundamental analysis. A Daily close below 0.6060 would open up the downside for continued selling.

EURNZD

Daily - Similar to EURAUD the downside potential is still looking very attractive. With the ascending channel now broken let’s monitor how this Daily candle closes. A break and close below the highlighted neckline of the head & shoulders pattern will confirm another leg to the downside.

IYF

EURJPY

Monthly - Further downside can be expected judging by the weight of this Monthly Marabouzo penetrating two key levels. The next key level of 120.00 would be our downside targets.

Daily - Short positions can be taken upon a pullback within an area of value. Trading out of the fib reversal would be more favourable as we like to trade out of those deeper pullbacks but due to the weight shown from May’s monthly candle we may not see price reach this level. Therefore selling from any rejections off of 122.00 would be valid.

IYF

EURGBP

Monthly - Notice the monthly candle closed just below the key level of 0.8850. Since rejecting 0.8500 multiple times we have seen a price explode to the upside. A further push higher into the Fibonacci reversal is not out the question but we do need to see some form of a pullback before entering long.

Daily - After looking for shorts we did see a possible case of manipulation as price spiked to the high to grab liquidity before closing back below the key level of 0.8850. As you can see we are still consolidating around two main areas of confluence (key level and 61.8% Fibonacci level). Short term selling opportunities still look appealing from this level.

IYF AUDUSD

Monthly - As expected this pair is pushing higher having rejected the weekly level of 0.6875. As rate cuts are expected (announced on Tuesday 4th June) and the AUD has been heavily bearish for a long time it is only natural the market ‘corrects’ itself. The only thing to consider is the rates were due to be cut on the last RBA announcement but they remained the same. A weaker AUD is possible but I would imagine the market is already pricing this in hence the recent strength.

Daily - Price is moving nicely towards the Monthly level of 0.7050 which is a significant level for this pair. A push into the fib reversal zone would provide us with some nice selling opportunities. For now we can look for intra-day counter trend moves.

IYF

NZDUSD

Monthly - We can see the monthly candle closed above the weekly level of 0.6500 having rejected this level for the second time with price failing to take out the previous low. Correlating my forecasts with the DXY and the potential for continued NZD strength this pair easily push higher to the next key level (0.6700) and beyond.

Daily - A new higher low has been formed on the Daily time frame and price is now pushing higher as expected. Upside targets remain at 0.6700 but we cannot rule out a further drive into the Fibonacci reversal zone or higher to the outer structure around 0.6900.