Weekly Outlook: 9/27/21 - 10/1/21
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?
From a fundamental point of view, there has been a lot going on in the markets this week both in crypto currencies and in Forex.
Let’s start with Forex. The beginning of the week was complicated for many traders who tried to trade when the market could not find its direction. Until the FOMC (Wednesday – FOMC Economic Projections includes the FOMC’s projection for inflation and economic growth over the next 2 years and, more importantly, a breakdown of individual FOMC member’s interest rate forecasts), many pairs did not make clear and precise moves. Exactly as explained in the last weekly outlook, this news brought a lot of volatility back to the market, which eventually found its weekend direction and made more rational moves.
Here is a recap of what was said during the FOMC:
– The Fed’s actions are intended to support the economy until the recovery is complete, and growth is expected to continue at a steady pace, albeit slightly lower than previously expected.
– Sectors that were affected by the pandemic have rebounded little, but labor market conditions are improving, with the pace of job growth in August slowing.
– The Fed will respond if inflation remains higher than expected. Inflation will be high, but will decline around next year. On the other hand, interest rates will not be raised until the labor market reaches full employment as determined by the Fed.
– A gradual reduction in monetary easing, ending around the middle of next year, will likely be appropriate.
– When progress on both of the Fed’s objectives is visible, the decision will be made to begin tapering, not excluding the next meeting.
The fundamentals have also played a very important role in the movements of cryptos with huge drops approaching 10% on some days last week for BTC or ETH. The reason is simple: China has declared that all crypto transactions are now considered illegal. The stupor of the markets and the pessimism of the investors generated a new mass bearish movement for the cryptos, which had a hard time taking the blow.
However, from a technical point of view, the cryptos have only made a retracement to correct the huge bullish impulse of the last few weeks up to 50%. So, trend reversal or simple correction before a new bullish push?
USDCAD – The move of the week: 200 pips drop after an overextended bullish move.
The price retraced and chased liquidity before continuing down towards its bullish channel bottom. Now the odds may still be bearish as the month comes to a close.
It was another excellent week in terms of analysis. All these movements had been explained daily on our free Discord and Telegram groups, as well as on Twitter. You haven’t joined us yet? Now is the time!
Looking ahead to next week: what moves should we be watching for?
USDCAD: Bearish continuation to support?
USDCAD could continue its fall and make a new bearish move equivalent to the previous impulse after having made a nice retest of the channel following its break. Now the price will just have to break the next technical support around 1.264 to try to continue falling.
NZDCAD: Trend following ahead?
The medium term trend looks bullish after this huge impulse of over 360 pips. However, for some time now, NZDCAD has been contained in a bearish correction channel that has just broken from below. If the short-term channel is reinstated, the price could continue to its channel top, with a continuation of the uptrend for the end of the month.
EURCHF: Structure breakout?
The price could have definitely broken its bullish structure after this new large impulse. At present, the price seems to be contained in a short-term uptrend channel, and its break from below could generate a new impulse until the next major support.
Gold (XAU/USD): Reversal?
The price seems to have broken the bullish structure and created a new major bearish structure. Now the price could fall again to reach its major technical support.
Ethereum (ETH/USD): Bullish rebound?
After retracing 50% of its bullish momentum and making a fakeout of support, ETH could bounce back to continue upwards until the next resistance. However, before that happens, the price will have to manage to break the top of the bearish channel created since the beginning of the retracement.
US30 – Fakeout of support?
Price has made a fake break of support in order to chase liquidity and could continue upwards to the previous high. If this resistance is broken, the price could go on to create a new high within this uptrend.
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, September 27th
GBP – BOE Gov Bailey 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.
Tuesday, September 28th
GBP – BOE Gov Bailey Speaks
USD – Fed Chair Powell Speaks
As head of the central bank, which controls short term interest rates, he also has more influence over the nation’s currency value than any other person.
Friday, October 1st
CAD – GDP m/m
It’s the broadest measure of economic activity and the primary gauge of the economy’s health
USD – Core PCE Price Index m/m
Differs from Core CPI in that it only measures goods and services targeted towards and consumed by individuals. Prices are weighted according to total expenditure per item which gives important insights into consumer spending behavior.
USD – ISM Manufacturing PMI
It’s a leading indicator of economic health.
Quote of the week – Psychological Preparation
“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.” – Mark Twain
Why are you afraid to take the plunge and invest yourself? You should be afraid of not doing it, because the regrets will eat away at you for a very long time. Imagine yourself in a bad period (we all go through them one day or another) in a few years, in which you dream of a better life. You never spent enough time to learn how to trade and you never took the chance, so you look back and think “What if I had continued trading? What would my life be like now? Those regrets would hurt, and the uncertainty would eat away at you.
There is no guarantee that you will succeed as a trader in the long run, because you may not be willing to put in the effort required to succeed. However, it’s better to have tried everything… than to live with the doubts and regrets of the life you could (maybe) have.
And, even if you fail… what will you really have lost? Trading teaches you invaluable life lessons every day. It teaches you to be a better person, more disciplined, more rational, more patient, and offers you the opportunity to learn more about yourself than any other discipline. Give it your all, and you’ll be proud to have participated in this magical experience, no matter what the outcome!
We wish you a great week of trading with us.