Hello, traders! It’s time for my weekly forex outlook again! Last week was a relatively quiet week, but two of the setups of last week (the EURUSD 4H long and the USDWTI 4H short) still worked out exactly as planned. I will review the USDWTI trade for you in this week’s trade review. The two other setups (USDMXN long and NZDJPY long) still didn’t yet materialise but they’re quite close, so they are still on my radar. Feel free to include those in your watchlists for this week again!
The one real surprise from last week was UK Prime minister May, who indicated that there would be early elections after all. It’s safe to say that no one expected this news and the British pound shot up afterwards, as the markets saw this as a signal that May might gain more support. And with more support, it is thought that she will have an easier time making better deals regarding Brexit.
If you want to keep up to date on setups during the week, have a look at my TradingView page. During the week, I will often publish a chart setup over there as well if I think it’s worth looking at.
Current market behaviour
Last week was a shorter week, with Monday off due to the easter holiday. Troubled by continued uncertainty regarding the situation in North-Korea, the US dollar sold off for most of the last week. It did, however, create a double bottom before moving a bit higher in the second part of the week.
You’d think that gold would see a steady rise, but it ended the week only a little bit lower than the week before. A lot of money flows are going into the Japanese Yen as well (with the USDJPY steadily declining), but gold is giving us a bit mixed signals and not a clear trending behaviour.
It’s worth noting that these days, a lot of the currency moves are fuelled by fundamentals as well. Things like the North-Korea situation, the French elections, Brexit and continued uncertainty on the proposed US tax changes (which might be coming next week) are driving a lot of the markets in the past weeks. It sometimes makes for unpredictable moves, which is something we have to keep in mind.
Oil, on the contrary, gave us a clear signal last week, selling off for the entire week (as indicated in my last outlook). This was partly fuelled by disappointing oil inventories (there’s too much supply) but also by strong technicals.