Weekly Outlook: 8/2/21 - 8/6/21

Are you ready for another week of trading? 

Let’s take a quick look at what happened last week before we start preparing for this new week.

What happened last week?

To begin, let’s review the analysis published in the previous weekly outlook.

EURCHF started to make the first part of the move in our analysis published last week, with the liquidity chase we were talking about earlier. Price broke the consolidation from below and went hunting for liquidity from buyers at the bottom of the channel with this bearish impulse. We will see in this week’s analysis how the price might now move in the coming days. 

EURCHF before:

EURCHF after:

GBPUSD made the move corresponding to our analysis, with a huge bullish impulse after the liquidity hunt from the bottom of the bearish channel. The bearish structure even broke, and the price corrected the whole bearish channel with a return to the resistance.

GBPUSD before:

GBPUSD after: 

Last week we were talking about a bearish move probably “closer than ever” on the DXY. The analysis was followed to the letter, and the bullish structure was completely reversed by the selling force that appeared mid-week.

DXY before: 

DXY after:

Concerning Gold (XAUUSD), we were also talking about a possible bullish impulse at the break of the bearish channel. This impulse did take place at the bullish breakout, although the price retraced before reaching the resistance that had been defined as a potential target. It is for these reasons that a strategy of securing profits throughout the position can be quite interesting, in order not to exit without any gain during this kind of reversal. 

GOLD before: 

GOLD after: 

It was another great week for our analysis! Now that this little recap is over, let’s get ready for next week.

Looking ahead to next week: what moves should we be watching for?

EURCHF: A reintegration of the channel synonymous with a bullish impulse?

After breaking the bottom of the bearish channel during an overextended bearish impulse, EURCHF may eventually re-enter the bearish channel. It is not impossible that the price will continue to fall before re-entering, but the re-entry could be a nice starting point for a bullish impulse until the next resistance. 

USDCAD: Bearish continuation ahead?

Several days ago, USDCAD broke the top of its bullish channel to chase cash. The re-entry of the channel allowed for a significant bearish impulse, and the bullish channel even ended up breaking by giving in to bearish pressure. Now, USDCAD seems to be rejecting its technical support, but even so, the break of this support could well lead to a bearish move to the next technical support. 

DXY: What is the near-term future for the dollar? 

As previously mentioned, DXY has followed our bearish analysis and reversed the bullish structure which now appears to be broken. At present, the odds could be in favor of a fall if the 91.693 technical support is broken, with a possible correction of the previous bullish momentum. 

DOGECOIN: A bull-run ahead? 

The signs seem bullish for Dogecoin, with remarkable upward pressure since the break of the downtrend. In the short term, the price could go to fill the rejection wick driven by momentum strength.

US30: Consolidation then continuation? 

Price is currently consolidating below key resistance, which does not seem to be able to reject price to the downside. If the consolidation is broken, the odds could be in favor of a new bullish impulse.

Please note that these analyses are based on price action elements only and are in no way trading or investment advice.

Fundamentals to watch for this new trading week:

Monday, August 2nd 

USD – ISM Manufacturing PMI

Leading indicator of economic health.

Tuesday, August 3rd 

AUD – RBA Rate Statement

The primary tools the RBA Reserve Bank Board uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions

Wednesday, August 4th

NZD – Employment Change q/q & Unemployment Rate

Key indicators of the country’s social and economic health.

USD – ADP Non-Farm Employment Change & ISM Services PMI

Key indicators of job creation stimulating the country’s economic activity and wealth creation.

Thursday, August 5th

GBP – Very big day from a fundamental point of view, with political and economic news making a complete assessment on the health of the country in the short and medium term.

Asset Purchase Facility

BOE Monetary Policy Report

MPC Asset Purchase Facility Votes

Monetary Policy Summary

Friday, August 6th

AUD – RBA Gov Lowe Speaks

As head of the central bank, which controls short term interest rates, he has more influence over the nation’s currency value than any other person.

GBP – MPC Member Broadbent Speaks

CAD – Employment Change & Unemployment Rate

The most important economic news of the month for the CAD with a huge impact on the volatility.

USD – NFP (Average Hourly Earnings m/m + Non-Farm Employment Change + Unemployment Rate)

The most important news of the month and the most awaited by many traders, with a volatility that is always there.

A very busy week in terms of fundamentals, which promises many opportunities on the markets!

Quote of the week – Psychological Preparation

“The more you talk about negative things in your life, the more you call them in. Speak victory not defeat.” 

If you start this new week with a negative mindset and thoughts filled with negativity, your results will resemble the darkness of your thoughts. The more negative you think, the more negative you will attract. Even worse, you will see things as darker than they really are, and you will fail to maintain the discipline and motivation to accomplish your projects.

Don’t think about failure because it is not an option. Don’t be afraid of falling, because getting up will teach you 10 times more than winning without even having to fight. Think about achieving your goals, your dreams, think about what you work hard for every day. Never lose sight of that, and go into the new week with your best foot forward!