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GBP/USD
The GBP/USD currency pair fell a bit during the trading week, as it looks like we are trying to reach down to the 1.2350 level. This is an area that is significant support, and if we were to break down below there, then it’s likely that the market could go looking to the 1.20 level. On short-term rallies, it’s likely that we could see selling given enough time, therefore I think this remains a “fade the rally” type of scenario. The US dollar is likely to continue to see inflows if the short end of the yield curve continues to see rising yields in America.
EUR/USD
The EUR/USD initially tried to rally during the course of the week but gave back quite a bit of strength as soon as the week was underway, and then of course the ECB dovish statement after raising 25 basis points did no favors for the currency itself. It looks as if the European Union is heading into a recession, so I think it probably makes quite a bit of sense that we continue to go lower. Short-term rallies continue to get sold into, and therefore I think a little bit of patience probably goes a long way. The 50-Week EMA above being broken could send this market toward the 1.10 level.
USD/JPY
The US dollar continues to see strength against the Japanese yen as we are threatening a major breakout. At this point, looks like anytime this pair pulls back, you should be looking to pick up a bit of value. Yes, the market is approaching a major resistance region, but all things being equal it looks like we are going to continue to see plenty of traders take advantage of the interest rate differential, therefore I think it’s probably only a matter of time before we go looking to the ¥150 level. That being said, if we were to break down below the ¥146 level, then it’s possible that we could go looking toward the ¥145 region for support.
USD/CAD
The USD/CAD rate exchange has fallen pretty significantly during the trading week, as we have slammed into the 1.34 level. This does make a certain amount of sense, considering that the oil market has been taken off, and that of course helps the Canadian dollar. That being said, it’s worth noting that the Canadian economy itself seems to be struggling, so we could turn around and rally from here. The 1.35 level will be important support, so if we do bounce from here, we could see that level become important. If we break down below that level, then the 50-Week EMA comes into the picture, which is currently around the 1.34 level.
Silver
Silver initially fell during the course of the week, testing the $22.33 level. That’s an area that has been the bottom of a massive consolidation area for several months, the fact that we have formed a hammer for the week suggest that we do have plenty of support underneath that could come into the picture. If we were to break above the top of the hammer for the week, it’s very likely that silver will try to go higher, perhaps reaching toward the $24 level, and then after that possibly the $25.50 level. That being said, this is a market that is very volatile under the best of circumstances, and we do have a lot of questions out there, meaning that risk appetite will be all over the place. Keep your position size small if you are trading somewhere, but it certainly looks like we are at least trying to pick things up from here.
NASDAQ 100
The NASDAQ 100 initially tried to rally during the course of the trading week but gave bank gains to show quite a bit of hesitation. The 15,250 level is an area that has been like a magnet for price. That being said, the market ended up forming a bit of a shooting star, so I think if we draw from here, we could go looking to the 14,600 level. We are in the midst of a bullish flag though, so I do think that it is probably only a matter of time before the buyers would come back, but we may have to pull back just a bit in order to provide enough value.
USD/CHF
The US dollar continues to destroy the Swiss franc overall, as we have climbed well above the 0.89 level. Ultimately, this is a market that I think will try to take out the 0.90 level, and when it does, I suspect that there will be a flood of momentum. That being said, a short-term pullback would make a certain amount of sense, but it should just end up being a nice buying opportunity. The 50-Week EMA sits right around the 0.91 level, and that might be the target in the short term. I have no interest whatsoever in trying to short this market.
EUR/JPY
The euro continues to grind sideways against the Japanese yen, working off the frost from the previous move higher. With the European Union going into recession, it is more likely going to be a situation where the markets will perhaps be a little bit of a pullback, but I also suspect that we are going to have momentum going to the upside with the ¥155 level offering support. Nonetheless, I think this is a “buy on the dips” situation until we break down below there. If we can break above the ¥159 level, then it’s possible that we could go much higher.
