XAUUSD

Weekly Forex Outlook: October 8

Aaand we’re back again with the weekly outlook! How’s the trading week been for everyone? This was an interesting week with some good opportunities in the markets. Some pairs showed us really nice moves, while other pairs were mostly in waiting mode (or rather, NFP anticipation mode). Overall, there were some nice trades to be had and I have a feeling that for reversal traders, the past couple of weeks were pretty good!

 

I have a request to my regular readers: aside from the weekly outlooks, what are the things you’d want to know more about? Or in other words, what kind of topics do you want me to write about on this site? I’d love to know the things you are struggling with so if I can help you in any way, let me know!

 

 

Past Week Review

 

But first, a quick review of the past week! As mentioned, some setups worked out really well and others didn’t do much. Starting with GBPCAD on the 4H charts!

 

GBPCAD 4H Short

 

I indicated that there was a spike at a significant level and if the price managed to break the trend line and also the level that I marked on the charts, there would be a good trade. I hope a lot of you kept an eye on this pair, because it did exactly that! For the remainder of the week, this pair moved down and this would have made you a lot of pips if you entered once all conditions were met!

 

The price is at a point where it might be wise to take (partial) profit, as the current level is also a previous swing high and there might be buyers ready to push the price back up. Regardless, this could’ve easily been a 2R+ trade and for those conservative traders, there’s nothing wrong if you closed this one before the weekend.

 

GBPCAD forex

 

 

GBPCHF 4H Short

 

Very similar to the GBPCAD short trade, there was also a nice trade to be had on the GBPCHF charts. I said that this setup was already further along than the GBPCAD setup and it eventually didn’t take long for this setup to break the support I indicated. Similarly, we could see the pair break down from that point and it ended the week much lower than it started.

 

It’s important to be able to read the charts and for me, this means looking at the right things. I indicated the massive bearish bar and the H&S formation. These are all clues that a setup like this is able to reverse soon. Still, even then, we don’t get in immediately but instead, we wait for confirmation. In this case, the break of a critical level shows us that the bears are just that bit more in control, which can give us the edge in the markets.

 

GBPCHF review

 

 

USDCAD 4H Short

 

Next up is USDCAD, one of the pairs that didn’t trigger an entry last week. For us, this doesn’t mean that we have a losing trade. It just means that our entry conditions have never been fulfilled, so we never took that trade. But still, I want to go over this setup as well, as it is a learning moment on having patience and defining the right entry criteria.

 

I indicated last week that there was a spike at a significant level so that there might be a reversal for us waiting if the price managed to break the local support. The price did stall a little bit but eventually never broke this local support and – partially fuelled by better than expected data releases from Canada – shot up again.

 

USDCAD review

 

 

USDJPY 4H Short

 

Finally, let’s review the USDJPY setup on the 4H charts. Not a lot happened to this pair, actually! It just ranged for the entire week and pretty much ended where it started the week. Similar as with USDCAD, this pair never broke the key levels I indicated on the charts, so there was never a reason to take a trade.

 

It’s still possible that this setup moves lower, though. Price action on Friday showed us a spike up (due to NFP) but than an engulfing bar down just before the weekend. This rejection and momentum pattern is always very interesting and this might indicate that we see more downside momentum early next week. I will keep an eye on this setup next week as well.

 

USDJPY review

 

 

Current market behaviour

 

Let’s have a quick overview of what happened in the broader market last week. As for the US dollar, we could see a good rally in the past week, with the DXY ending the week much higher than it started. This is also the reason why the USDCAD and USDJPY setups didn’t really work out and as with any USD setup, it depends on the bullishness of the dollar if we can see a reversal or not.

 

weekly outlook

 

Gold has ended the week lower, but made a strong move up on Friday. This was caused by the NFP result, which disappointed. This, in turn, made the dollar go lower and money flows move to safe havens like gold.

 

Finally, oil has moved lower for pretty much the entire week. It’s been a while since I’ve seen good opportunities in oil so I haven’t been following it that closely, but it seems that oil is in an upwards channel and will probably move towards the lower boundary of this channel before moving back up:

 

USDWTI review

 

 

The upcoming week

 

The upcoming week is very quiet on data. We start off with a Canadian and Japanese holiday on Monday. From Wednesday on, there’s some occasional USD data and Friday is the busiest day with USD CPI and retail sales data. Here is the overview of next week:

 

  • Monday: Canada holiday, Japan holiday
  • Tuesday: CHF Unemployment Rate, GBP Manufacturing Production
  • Wednesday: USD JOLTs Job Openings
  • Thursday: USD PPI, USD Crude Oil Inventories, USD Federal Budget Balance
  • Friday: USD Core CPI, USD Core Retail Sales, USD Retail Sales

 

For this weekly forex outlook, I’m keeping an eye on the following pairs:

 

Follow my published ideas on TradingView.

 

 

AUDCHF

 

The first setup of the week is AUDCHF on the daily charts. I like this setup since we’ve seen a spike up to a previous swing high, after which we’ve seen a pretty strong sell-off to where we are now. We could see a smaller bounce when the price got to a local support level and trend line, but it couldn’t make any higher highs anymore and right now, things are looking bearish again.

 

We’ve seen a good uptrend, a major resistance level, RSI divergence and good bearish momentum recently. To enter this setup, I want to see the trend line broken AND the local support level broken (see the blue rectangle). My price alert is set at around 0.75700.

 

AUDCHF

 

 

CADCHF

 

Another CHF setup is CADCHF, also on the daily charts. This is a chart with the price that has been in an uptrend for a long time, but the rally has been changing character. There is a big RSI divergence between the swing highs. The market top we’ve seen has been selling off recently, with a small retest of the moving average on Friday.

 

The price saw a bounce on a resistance-turned-support level last week but other than that, we want to see that local support level broken and I’m watching the 0.77450 level for this. If the price manages to break this level with some momentum, I believe we have a good trading opportunity.

 

CADCHF

 

 

CADJPY

 

This time, let’s have a look at a 4H setup. The CADJPY chart is interesting because of multiple reasons. First, the price made a triple top recently and even though there was some ranging action afterwards, we could see a slow move down. It has broken the major trend line that connected the swing lows in this uptrend last week, after which we could see strong bearish candlesticks.

 

Now, CADJPY has found a local support (previous resistance, now support) and at the same time, we can see that the price tried to go higher but was quickly pushed back down on Friday. If we can break this local support (with alert set at 89.617), I can definitely see some more downside moves.

 

CADJPY

 

 

XAUUSD

 

Finally, gold! It’s been a while since we’ve discussed this one since, for a long time, I didn’t really saw any good trading opportunities. But this might change for next week! Let’s recap: the pair has been in a long downtrend, with the Fibonacci extension now reaching the 261.80% level. Of course, there is RSI divergence and interestingly, we saw a spike to the downside but a quick rejection of this level and a move back up!

 

Spikes like this should catch your attention since they signify a strong rejection of a level and if we see a continued move up and break of the local resistance around 1279.25, there might be a really interesting long trade waiting for us.

 

XAUUSD

 

 

Good luck trading!

 

What setups are you looking at? Share your thoughts in the comments!

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Felix

I'm a full-time, independent forex trader. I've been trading for over 10 years and specialise in reversal trading, trading psychology, algorithmic trading and coaching others. When I'm not trading, I'll either be travelling the world or rock climbing (likely both). Read my story here.

  • Thanks for sharing excellent info, when can I get next update? also tell me how to subscribe to your blog post?

    • Hi Jack, I’m updating my forex outlooks every weekend (Saturday or Sunday). You can subscribe to my newsletter by entering your email address on the right panel of the homepage. This way, you’ll get updates once something new is posted.