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The AUD/USD strengthened quite significantly during the week and broke above the 0.68 level. The market threatened the 0.69 level on Friday but pulled back a bit. It makes some sense at this point that we will get a short-term pullback, but if we can hold the 0.68 level on some type of bounce, it is likely that this market will try to get to the 0.70 level above. On the other hand, if we were to remove the bottom of the weekly candle, then the Aussie would rather fall to the 0.66 level.
The EUR/USD rallied during the trading week and broke above the 1.09 level after the ECB raised interest rates while the Federal Reserve decided to keep interest rates on hold. All things being equal, the 1.10 level above is the psychological barrier that people will pay attention to. That being said, it looks like we’re starting to show some exhaustion on Friday, so I think a short-term pullback is likely. However, I don’t expect much of a move in the short term as I think we are still stuck in a range.
The USD/JPY rallied significantly over the course of the week as we continue to see a lot of very bullish behavior. The ¥140 level will be psychologically important, but the real support will be lower at the ¥138 level. The ¥138 level is the top of the ascending triangle and should therefore be a massive “market floor”. As long as the Bank of Japan remains this loose with monetary policy, I just don’t see how the trajectory does anything other than go higher. In fact, the “measured move” suggests that we could reach as high as 148 yen based on an ascending triangle and possibly even a massive “W pattern”.
The GBP/USD also rallied significantly during the week as it was against the US dollar. At this point, the market is likely to continue rising with a target of 1.30 above. Short-term pullbacks will offer buying opportunities, but you’ll be better served waiting for some type of value to emerge. After all, the sell-off in the US dollar is still fresh and of course may be a bit overdone in the short term.
The NASDAQ 100 it shot straight up during the trading week and tested the crucial 15,250 level. This is an area that was previously a major resistance barrier, so I think you will need to pay close attention to it. If we break there, we could go much higher, perhaps looking at the 16,000 level. Short-term dips at this point continue to buy opportunities from what I can see, although it is clear to me that we are overbought. Quite frankly, this is a massive “FOMO market”. Keep in mind that the NASDAQ 100 is being pulled higher by about 7 stocks, so unless Tesla and others start to fall, this market will be pushed higher.
Gold markets initially fell during the trading week but turned around to show signs of life and form a massive hammer. This hammer was based at the $1950 level, an area that has been important several times. In this case, I think we have an opportunity to push the market a little bit higher. If we manage to break above the $2000 level, then gold is likely to start racing towards that level again, threatening a “triple top”. That being said, I think in the short term it’s more likely that gold won’t stay in that $50 range, so if you’re a short-term trader, this could be a good market for you.
The DAX recovered during the week, hitting highs again and even hitting a new, new high. At the moment it looks like the DAX is poised to continue its rise and a break above the weekly candle top is certainly very bullish. It is worth noting that even though the European Central Bank raised rates during the week, it seems as if the stock market in Frankfurt simply chose to ignore it. We have seen a lot of bullish pressure recently and I think that will continue to be the case. This will be especially true if the euro starts to lose a bit of strength.
The Hong Kong 50 has had a fairly bullish week, touching the 50-week EMA near the HK$19,950 level. However, we are right at the convergence of not only the 50-week EMA, but also the short-term descending trend line. The question now is whether this and of course the HK$20,000 level will offer enough resistance to keep the market from breaking out. If the market were to break above HK$20,000, then you could see a bigger move, possibly towards the HK$22,000 level. You would be testing the 200 week EMA at this close.
On the other hand, if the market fails in this area, it is very likely that the HK 50 will look towards the HK$18,000 level again, as it has been in a downtrend for several years. Additionally, some of the data coming out of China is starting to deteriorate.