Forex Weekly Forecast & FX Analysis October 04 - 08

EUR/USD

Last week, the US dollar strengthened its positions against the Euro to a considerable extent. The downward movement made the price fall below the level of 1.1590. The indicators that are currently placed at their local minimum values also indicate a significant drop. Looking at the oscillator, you can see that it has spent a long time in the oversold area. Thus, one can conclude that the currency pair is currently at the bottom of the market; therefore, it’s too late to sell short since the major part of the downward movement has most likely already been completed. Therefore, if you want to catch the downward movement, you’re already late. As a result, the best solution would be to refrain from trading this currency pair at the moment. Meanwhile, you can also consider upward trading as a corrective measure.

GBP/USD

Last week, the British pound dropped strongly against the US dollar. On the price chart, one can observe a considerable downward movement, as a result of which the market has broken through very strong levels at least twice. A downward movement is also demonstrated by the indicators that keep on falling. The oscillator tests the oversold area regularly. If you look at the price chart, you can see that the price is distancing from the moving averages. Therefore, we expect that the market may need a correction; however, an upward contract should be opened only if the price rises above the level of 1.3482.

USD/JPY

The US dollar has shown a very strong upward movement against the Japanese yen, advancing from 109,200 to 111,800. At the current stage, we are observing excessive growth, as a result of which the histogram is reaching its maximum values in several months. The oscillator has been swaying in the oversold area for a long time. As for the price chart, we observe the level of 111.500. The price has broken through this level in the upward movement; however, it fell below it fairly quickly. Thus, again we can state that the market needs time to recover. However, if we consider trading options, the horizontal movement in the area of the 111.500 level will be quite acceptable.

AUD/USD

The Australian dollar continues to develop in terms of a downwards trend with the elements of low volatility against the US dollar. One of the most important conclusions of the past trading weeks is the fact that the price has moved from the left to the right side of the trend movement. This situation can indicate either a decrease in the significance of the current trend or an attempt to form a new movement. However, one needs to remember that volatility indicators neither show nor confirm the lack of directional movement. Taking into account the fact that the current price reaches a rather significant level of 0.7189, one can consider options for bullish trading.

USD/CAD

The American dollar is demonstrating an upward trend against the Canadian dollar in the medium term. However, considering the operations of the last month, one can clearly trace the downtrend line. Paying attention to the indicators and, primarily, the oscillator, you can notice that it’s currently showing sideways movement and lack of volatility. However, given the position of the price and the moving averages, you can rely on the short-term trend and consider the options for bearish trading. This assumption is reinforced by the fact that the currency pair under discussion is gravitating towards its moving averages and neutral values. Bullish trading options can only be considered if the downtrend line is broken in the upward direction.

USD/CHF

The US dollar continues to develop its uptrend movement against the Swiss franc. However, given the trading operations of the last few weeks, you can clearly see the divergence between the price chart, which is growing and updating the maximum values, and indicators that are moving down. Also, one needs to take into account that the price has significantly swayed away from the moving averages and from its trend line. Therefore, you can consider trading short when the market needs a correction in order to restore its neutral values.

USD/RUB

The US dollar continues to develop the stage of its downward movement against the Russian ruble. Interestingly enough, within the framework of the current weekly review, the Russian ruble was the only currency against which the USD was losing its positions. A downtrend is clearly visible on the moving averages, which have an apparent downward slope. The most important characteristic of the current market segment stems from the significance of the 73.00 levels. In the past weeks alone, this level has been tested from below at least four times. Each time, a reaction took place. The indicators show no volatility as they are close to their neutral positions. Therefore, you can consider some bearish trading options. A bullish contract can only be opened if the price is above the level of 73.00 and the moving averages.

Gold

The price of gold continues to fall, forming a downtrend. The value of this asset has already dropped significantly, having fallen below its average level. If you look at the price chart in conjunction with the indicators, a clear divergence can be traced since the price chart shows a downward movement while the indicators strive up. However, you are not advised to trade based on this divergence as it has already been worked out by the market in the last days of the previous week. Therefore, we can only say that the global movement is the downward one. Given this fact, you can consider options for bearish trading, especially since the market is once again demonstrating a decrease in its volatility at the trend level. If the trend line is broken by an upward movement, opening a bullish contract would be an acceptable option.