Market Wrap:
14th-18th Oct

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As expected, the Brexit headlines continued into this week with Boris Johnson announcing on Twitter that the EU and the UK have come to an agreement on a fair deal. This continued to move sterling higher with prices reaching highs of 1.3000. We must remind ourselves that Boris Johnson still needs to get his deal passed through the UK parliament which could prove difficult. If the ministers were to reject the new deal presented to them a no-deal Brexit will become more likely which would be negative for the Great British Pound. What we do know is that Brexit headlines will continue to cause volatility to the GBP ahead of the deadline day on October 31st.

Australian employment fell to 14.7k this week as expected backing the need for more stimulus from the RBA. Despite this, the Australian Dollar rose this week against the USD and JPY showing us that the further rate cuts will likely be priced in by the markets.

The USD index shows the price breaking through the long-term supporting trendline from the 2018 lows. This could lead to the further decline of the USD technically speaking. Fundamentally the Federal Reserve’s chances of cutting rates remain high which is driving the USD lower.

GBPUSD continued to rise this week reaching highs of 1.3000. The price is trading above the key trendline resistance from the 2018 highs giving technical traders long opportunities. The price is currently capped at the 1.3000 resistance where we could see some short-term selling re-enter the market.

AUDUSD climbed against the USD this week with the double bottom pattern looking more and more likely to complete. With price forming another weekly higher high, higher close we can anticipate further upside to this currency pair with the highs of 0.6900 being likely targets.

NZDUSD found support once again at the lows after having a bad start to the week. This fall in price came as a surprise considering CPI data for Q4 came in higher at 0.7%. We could see an increase in long contracts from the commercials once again in the commitment of trader report considering the initial fall in price. We expect prices to continue to move higher towards the 0.6440 highs.

USDCAD continued to move lower as expected this week highlighting the USD weakness. As with the recent impulse moves, we typically see 5 weeks of bearish momentum from the pair suggesting we could see a continued sell-off into the support lows.

USDCHF rejected the key range highs once again breaking through the trendline support. If the USD continues to weaken, we could see the currency pair prices head towards the range lows around 0.9700.

 

EURAUD could be a chart to watch going into next week as price failed at the left shoulder resistance of the head and shoulders pattern. The weekly candlestick shows the price continuing to close back within the previous candlestick ranges suggesting sellers are active on this market and we could see prices back at the trendline support.

Market Outlook:
21st Oct

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The GBP is set to gap lower on the open this weekend as Boris Johnson’s Brexit deal was overturned by lawmakers who voted 322 to 306 in favor of an amendment forcing the Prime Minister to ask the EU for an extension to Brexit. This was the likely scenario out of the weekend as the opposition parties want to cause delay and frustration to force a general election. The GBP has been reported to gap significantly off this news with some brokers reporting a 200-pip gap lower.

In other news, the European central bank is set to announce it’s latest stance on monetary policy with the likelihood of interest rates remaining unchanged. This will largely be due to the current Brexit situation and the recent bout of strength in the Euro. The ECB have expressed recently the need to keep the Euro lower and will likely continue with a dovish tone.

The U.S. dollar was the biggest loser of the week alongside the Japanese Yen. The New Zealand Dollar continued to gain strength as expected which is likely to continue heading into this week.

The USD Index closed significantly bearish showing the USD weakness. We expect this bearish sentiment to continue as traders will look to sell the USD on any rallies. The start of the week may see prices climb higher as a relief to the recent drop.

EURUSD continues to break higher in line with the USD index, if the price was to retrace from here, we could expect the recent resistance of 1.1070 act as support for trend traders now the higher high has been confirmed.

GBPUSD will likely gap lower on the recent news of lawmakers voting against the latest Brexit deal forcing Prime Minister Boris Johnson to send a letter to the EU asking for an extension to the negotiations. If the EU agrees to delay Brexit we could see the GBP drop with uncertainty remaining in the market.

AUDUSD closed bullish for the week with the price likely to continue higher into the weekly swing highs of 0.6900. The minor support around 0.6800 will be an ideal area to look for further long opportunities.

NZDUSD has broken through the inverse head and shoulders neckline and will likely head towards the key highs of 0.6440. If the price can re-test the neckline support, we could see further long opportunities from here.

NZDJPY closed bullish for the week in line with the strength and weakness tables. The price is expected to continue into the previous swing lows of 70.29 where the weekly trend could continue. This gives opportunities to buyers with long opportunities in minor support areas.

Silver closed with another indecision candle at the key support level and with the USD likely to weaken further prices of the precious metal could move higher. Technically price is forming a bullish breakout pattern on the weekly timeframe and if the price breaks the trendline resistance the market will likely push higher into the swing highs.

Market Wrap:
9th-13th Sept

The European markets were the ones to watch this week as the ECB announced its latest monetary policy outlook. The ECB remained dovish as we expected which sent the Euro lower however that sentiment didn’t last long as the US President Donald Trump jumped on twitter to send the USD lower pushing EURUSD prices higher.

The GDP data out of the UK continued to paint a positive picture of the economy with a growth of 0.3% from the previous month. The GBP continued to gain strength off of the back of this with GBPUSD notably breaking above the 1.2400 level.

The USD Index shows the extremes the USD went to this week, the price fell beyond the weekly lows before recovering and breaking above the resistance at $99.00 after the ECB press conference. This was overturned quickly, and the price fell showing a rejection of the level again. The USD consolidation looks set to continue unless Donald Trump continues to try and devalue the currency.

EURUSD almost broke out of the weekly channel and the key resistance of 1.1110 after re-testing the swing lows. EURUSD bulls will have to wait as price looks likely to reject the resistance once again.

AUDUSD stayed quiet this week suggesting some retracements to come over the next week or so. A pullback is likely with minor support at the previous daily highs.

USDCAD found support around 1.3150 despite the bearish engulfing candle last week. The pullback was likely after such a significant fall the previous week, now price is back re-testing the daily double top low we expect USDCAD to continue its path lower.

In the market outlook last week, we looked at Brent Crude Oil as we expected the price to break out of the channel if the USD weakened. With the swings in the USD Brent Crude Oil remained within the channel range closing bearish highlighting the technical analysis not lining up with our bias currently.

Gold continued lower this week and ignored the USD weakness as expected. The commitment of trader reports showed Gold short contracts at all-time highs giving us our short bias. Price rallied into the double top neckline and rejected showing us the sellers are active.

The SPX500 continued to push higher working within the channel, price is heading back towards the all-time highs which investors will be watching closely for with a break or bounce. History suggests we could see a breakout higher and if price closes above the current all-time highs we could expect a stock market breakout.


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