Forex Weekly Forecast & FX Analysis October 18 - 22
EUR/USD
The Euro continues to develop the downtrend stage against the US dollar, despite the fact that last week an upward correction movement emerged and stopped in the trend line area, very close to the level of the moving averages. This movement coincided with the divergence development, which is demonstrated by the price chart and indicators. In the current segment of the market, the downtrend is dominant. Therefore, in general, traders are advised to consider bearish trading options. This hypothesis is reinforced by the fact that the market is close to the trend line here and now. This fact indicates the existence of the optimal buying point. If an upward movement occurs and the price consolidates above the trend line, you can open a bullish contract with a target at 1.1697.
GBP/USD
The past week led to a fairly strong corrective upward movement in the currency pair of the British pound and the US dollar. The upward movement ended in the area of trend lines and moving average levels. Nevertheless, if you look at the indicators, they all point to a possible continuation of the upward dynamics, which has not yet lost its strength. Although the histogram is growing, it still has not reached its maximum value. In turn, the oscillator failed to enter the overbought area. Therefore, traders have every reason to consider bullish trading options.
USD/JPY
Last week, the US dollar rose strongly against the Japanese yen, having reached above the 114,000 level. At the moment, we are at the top of the market, at the highest point in more than a few months. Therefore, it is already too late to open an upward contract in the direction of the current trend since we missed the opportunity to catch this movement. Among the patterns that can be identified for the current market segment, it is possible to note the divergence between the price and the indicators. The price is rising and updating the maximum values, while the indicators are aimed downwards. Therefore, traders can consider bearish trading as an option; however, this strategy can be used solely as a corrective movement. Since we are working against the trend, trading is risky.
AUD/USD
The Australian dollar continues to develop the growing stage against the US dollar. As a result of recent weeks' trades, the price has found itself above the moving averages, having reached above the strong level of 0.7327. The upward movement is also proven by the price chart and indicators. Taking into account the fact that we are at the local top of the market high, it is undesirable to open an upward contract. Instead, you should wait for a correction. Moreover, the current market segment is perfect for opening a downtrend since, for a given currency pair, a corrective movement may be required for the market to take a break from a directional upward move. Therefore, traders can consider options for downward trading in the area of the trend line.
USD/CAD
The US dollar continues its downward movement against the Canadian dollar. It has dropped significantly and reached its lowest levels for more than several months. The downward movement is confirmed by all instruments, including indicators that have also been developing in the negative area for a long time. All the analytical instruments indicate that the current point of the price movement can be characterized as the minimal one. Therefore, it is not recommended to trade short since we have already missed the chance to catch the current movement. At the same time, if you look at the indicators, you can see that the oscillator has been situated in the oversold area for a long time. In turn, although the histogram is placed in the area below zero, it is aimed upwards at the last points, which indicates a divergence in relation to the price movement. Thus, traders can consider bullish trading as an optional corrective model towards the 1.2441 level.
USD/CHF
The price development of the US dollar against the Swiss franc occurs mainly near the strong level of 0.9300. During last week's trading, this movement was mostly neutral. However, the downward trend could also be traced. As a result of this movement, the price has found itself below several levels at once, as well as below the moving averages. However, if you look at this currency pair globally, you can see a clear uptrend. Therefore, traders can consider bullish trading options. Meanwhile, the contract can only be opened if the price is above the 0.9300 level.
USD/RUB
The American dollar continues to develop a downward movement against the Russian ruble. Nevertheless, the price chart includes several anomalies at once. First of all, we should note the presence of a candlestick with a very long upper shadow, which has broken through the level of the moving averages and all the other strong levels in the immediate vicinity. The second anomaly is the presence of a divergence between the current price segment and all the indicators that have been looking up for a long time. Thus, we can note the presence of uncertainty for the current section of the market, meaning that there is every reason for bullish trading as a corrective movement.
Gold
The price of gold continues its attempts to form an uptrend. This dynamic is clearly demonstrated by all analytical tools. Considering the results of recent weeks' trades, it can also be seen on a color chart. We must note the fact that for the first time in a long period, the price of gold has reached above the level of moving averages and several nearby price levels at once. Thus, we can say that the upward trend is strengthening, which means there are reasons to consider bullish trading.
