Even if we do rally from here, then it’s likely that we will see an opportunity to short this market again, especially as the US dollar has been like a wrecking ball against almost everything. 

The EUR/USD has gone back and forth during trading on Monday, as we continue to see the parity level attract a lot of attention. It’s worth noting that the market is simply chopping around, and it’s not doing anything right now. That does make a certain amount of sense that we are going to continue to see a lot of confusion around this area, just simply because there’s a lot of psychology attached to the idea of parity.

The US dollar will continue to be stronger than the Euro in general since the European Union has a whole host of issues that the United States does not have to deal with. The first one of course is going to be energy and the fact that it may be running out of energy. At this point, there are a lot of concerns about the EU energy supply this winter, and there does not seem to be anything out there changing the outlook for Europe. Because of this, the economic outlook for Europe must be thought of as poor at best.

Dollar Backed by Federal Reserve

• The US dollar is backed by a very hawkish central bank, one that is willing to fight inflation. In other words, interest rates are going up in America and that typically does help the currency.
• Beyond that, we also must look at this through the prism of simple momentum.
• The Euro has been falling for ages, and it does take quite some time to turn the entire trend around.

Even if we do rally from here, then it’s likely that we will see an opportunity to short this market again, especially as the US dollar has been like a wrecking ball against almost everything. The 50 Day EMA sits just above the 1.02 level, and I think then continues to be an area that people will pay close attention to. After that, the market then starts to focus on the will .04 level, an area that has been important a couple of times in the past, as it had previously been supported. “Market memory” could come into the picture and offer a certain amount of resistance selling. Either way, I don’t have an interest in buying the Euro anytime soon, and therefore I’m just looking to pick up the US dollar “on the cheap.”

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• The GBP/USD has attempted to bounce during the trading session on Tuesday as the selling pressure seems to be letting up a bit.
• We are in the midst of the Jackson Hole Symposium, and central bankers will be speaking quite a bit this week.
• People will be trying to figure out what happens next, as a lot of traders have decided to call the bluff of central banks.

There’s been this narrative going around that perhaps central bankers are going to pivot, because of poor economic numbers. What traders seem to be ignoring is the fact that inflation is out of control, and even though it is slowing down a bit, in places like the United States it’s 8.5% year over year, and in the United Kingdom, it’s over 10% year over year. Because of this, central banks are going to have to tighten, despite the fact that it will almost certainly cause a recession.

Recession is Coming

The Bank of England already said that a recession is coming, essentially confirming what most people want to say out loud. The market continues to see a lot of narrative from time to time that has people thinking differently, especially in stock markets. However, in the Forex world, you can see that traders are running towards the US dollar. That should continue to be the case, especially if Jerome Powell ends up putting rumors to rest about the Federal Reserve and pivoting.

It’s been quite an interesting sideshow, watching traders try to talk themselves into a pivot that’s not coming.The US dollar is going to be like a wrecking ball for the entire world, and the United Kingdom is not going to avoid this problem. However, rallies will happen from time to time, but those are going to be opportunities to pick up “cheap US dollars.” Going forward, I suspect it’s probably a “fade the rally” type of situation. In fact, is not to we break above the 1.25 level that I would consider buying the British pound. Even then, I will have to see what the fundamental noise and news is, because although technical analysis can help, in times like this it’s more about the fundamentals than anything else, as there have been so many crosscurrents at the same time.

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I’ll be looking for signs of exhaustion to sell, or break down below the lows of the last 48 hours to sell.

• The West Texas Intermediate Crude Oil market bounced a bit Monday as we continue to see this market throw a lot of volatility back and forth.
• The $90 level is currently being tested, an area that previously had been supported.
• This is a market that is so negative in general that I think it’s difficult to get aggressive to the upside at this point.

It’s All About Demand

In fact, I think this has become more or less a “fade the rallies” type of situation, as the market has been trying to focus on quite a few different things, not the least of which of course will be the fact that the market has to worry about whether or not there is going to be demand. After all, the world seems to be slowing down, which has a major effect on whether or not prices will rally.

If we were to break down below the lows of the last couple of days, it’s likely that we will continue to see noisy behavior, and therefore I think we have a situation where you continue to see a lot of momentum going into this market. This is a market that I think will continue to be very difficult to get excited about, and will more likely than not go looking to the $85 level, followed by the $80 level.

Even if we were to rally from here, the $95 level looks to be an area that is going to be difficult to break above. Think of it this way: OPEC recently had a minuscule production increase, and prices actually fell. In other words, even though they are not pumping as much oil as one would hope, it still cannot pick up prices. This tells you just how fragile the economy seems to be at the moment, and I think we’ve got a situation where you have a market that is going to continue to look at this through the prism of something bad coming. When the economy slows down, the demand for crude oil drops off the face of the earth. With this, I’ll be looking for signs of exhaustion to sell, or break down below the lows of the last 48 hours to sell.

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SHIB/USD bounced to short-term highs on Sunday and early this morning, but its move higher has shown signs of a lower trajectory in the past couple of hours.

SHIB/USD fell to new lows on Saturday. as the onslaught in the broad cryptocurrency market produced widespread panic. As bad as things got early this weekend, SHIB/USD has not fallen through its lower values of late September 2021. While optimists may try to point to this feat of not falling to long term lows like its major counterparts as an accomplishment, Shiba Inu has still sustained substantial losses. The low of nearly 0.00000710 this weekend shows the bearish trend is still forcefully causing problems.

In later trading last night SHIB/USD did climb to a ratio of nearly 0.00000823. However this move upwards has seemingly hit gravity and SHIB/USD has moved lower, and is now hovering below the fractional level of 0.00000800. Speculators of Shiba Inu must understand that SHIB/USD is purely a wager on behavioral sentiment within the broad cryptocurrency market. Clearly after this weekend’s fall to new lows for the likes of Bitcoin and Ethereum, fragile conditions persist.

Yes, a move higher was attained in the past day, but most traders likely remain skeptics and concerned regarding what is going to happen near term. While SHIB/USD certainly reversed off of Saturday’s lows, it did start to test marks seen in late September of 2021 when it was hitting bottom during this weekend’s early selling mayhem. If current support levels continue to prove vulnerable it is completely realistic to imagine SHIB/USD could fall below the 0.00000700 juncture. Timing the market remains an extremely difficult task.

Because of the fractional and fast paced trading within SHIB/USD bettors are urged to use entry price targets to ignite trades. The broad market conditions may prove to be very choppy at best in the coming days. The move higher in the past day can be viewed as a potential ‘dead cat bounce’, meaning that the market has reversed higher and may attract speculators on the buy side only to watch SHIB/USD and other cryptocurrencies to fall in value once again.

Traders who have survived this past weekend’s carnage and can still speculate may want to try and sell SHIB/USD on moves higher. This tactic means that traders should wait for technical resistance levels to prove durable and launch their selling positions from the higher levels. If SHIB/USD struggles to surpass the 0.00000800 juncture in the short term, it could be a sign that another stronger downturn will ensue.

Shiba Inu Coin Short-Term Outlook

Current Resistance: 0.00000823

Current Support: 0.00000753

High Target: 0.00000857

Low Target: 0.00000710

I’m civilly waiting for a candlestick that shows exhaustion and I will start shorting again once it occurs.

The Euro has bounced significantly from the 1.04 level during the trading session on Thursday, as the previous support level has come back in with quite a bit of “market memory” in order to stabilize a bit. At this point, the Bureau had been oversold so it does make a certain amount of sense that we would have a relief rally. Having said that, the market is more likely than not going to continue to see sellers above, so I think it’s only a matter of time before the sellers come back into the picture and punish the Euro.

Higher interest rates in the United States and a tight central bank has a lot of money flowing toward the US dollar, not the least of which is due to the fear out there. If we break down below the 1.04 level, and I do think we will eventually, that opens up the Euro for an exchange rate of 1.02 given enough time, perhaps even down to parity by the end of summer. In this environment, moves happen rather quickly, so be aware that you could see a lot of noisy behavior, but the trend is still most decisively to the downside.

The 50 Day EMA is above and tilting lower, so I think it is probably only a matter of time before that offers a certain amount of dynamic resistance that people will clamor toward, and start selling again. After that, we have the 1.08 level as a significant resistance barrier, and I think that if we were to suddenly reach that area, there’s a lot of selling between there and the 1.09 level that will have to be paid close attention to. It’s not until we break above all of that that I would consider buying this pair, despite the fact that this was a rather impressive rally. That being said, Friday can also be a bit bullish but by the time you get through the weekend, I would have to think that there will be more bad news out there that people are willing to jump on. With this, I’m civilly waiting for a candlestick that shows exhaustion and I will start shorting again once it occurs. Until then, I’m sitting on my hands and waiting for my opportunity to pick up “cheap US dollars.”

At this point, it seems like the only thing that people want is the US dollar in this type of environment.

The gold markets pulled back a bit during the trading session on Thursday to drop to the previous uptrend line. The uptrend line has been crucial, so therefore it’s likely that we will continue to see buyers trying to pick this market up. After all, we had initially fallen during the trading session on Thursday, only to see a lot of momentum to the upside. The 200 Day EMA above will offer a bit of dynamic resistance, and it should be noisy, to say the least. After all, we have gone back and forth quite viciously over the last 48 hours, so it is worth paying attention to whether or not we are trying to form a bit of a “double bottom.”

The $1800 level looks to be crucial, and as long as we can say above there, it does make quite a bit of sense that we would see buyers willing to come in and pick this market, it looks to me as if we are ready to attempt to break to the upside, but I think you need to wait for pullbacks in order to pick up a little bit of value. Gold does tend to do well in times of concern, and I think it is possible that we could see buyers come into this market hand over fist. However, in the short term I would anticipate a lot of volatility, therefore I would not jump in with a huge position. In fact, I would build up a position slowly as it worked out, recognizing that the volatility is going to get worse, probably not better.

Ultimately, this is a market that if it can break above the $1880 level, it’s likely that we will continue to go to the $1900 level, and then the $2000 level after that. Having said that, we would need to see interest rates drop quite drastically or silk type of financial shock to get things moving in that direction. If we were to break down below the $1800 level, then we could see a lot of negativity in this market, pushing it down to the $1750 level, followed by the $1700 level. At this point, it seems like the only thing that people want is the US dollar in this type of environment.

The price is more bullish above 0.7063.

My previous signal on 7^th June was not triggered, as there was no bearish price action when the resistance level which I identified at 0.7213 was first reached.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be taken prior to 5pm Tokyo time Tuesday.

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7038 or 0.7063.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

• Long entry following a bullish price action reversal on the 1H1 time frame H1H1H1 time frame immediately upon the next touch of 0.6995, 0.6976, or 0.6950.
• Put the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

AUD/USD Analysis

I wrote in my previous forecast on 7^th June that this pair was trading in a choppy, wide range, making trading unpredictable except when fading price extremes. This would point to a long trade from a bullish bounce at 0.7143 or a short trade from a bearish reversal at 0.7275. I recommended waiting for two consecutive higher hourly closes above the resistance level at 0.7213, and then enter a cautious long trade if you want to trade this currency pair today. This was not a good call as it led to a losing trade.

The technical picture and markets in general have moved quite dramatically since then, with risk-off sentiment coming to dominate after US CPI data last week showed a shock rise to an annualized rate of 0.75%. This sent the US Dollar higher and risk assets falling, and the AUD is a major risk asset, so the price here has come down heavily.

A few hours ago, we saw the price hit the big round number at 0.7000 and make a bullish bounce there. For how long this low will hold, is anyone’s guess – I suggest not to have any faith in it until the price gets established above at least 0.7038 or ideally 0.7063.

A short trade from a strong bearish reversal at 0.7063 is likely to be the best opportunity which might set up here today, as it is unlikely that we are going to see anything happen which really changes the risk-off sentiment currently dominating markets.

There is nothing of high importance scheduled today regarding either the AUD or the USD.

XRP/USD has come off lows seen yesterday when it traded slightly below the 38 cents level, now the 40 cents ratio is within sight as traders guess what will happen next.

XRP/USD is trading slightly above the 39 and half cents mark as of this writing, having achieved a bounce higher since late last night.  Early on Sunday morning, XRP/USD was trading below the 38 cents ratio. The move higher since yesterday may be encouraging for optimistic bullish speculators who continue to look for rays of hope in the cryptocurrency markets.

However, skeptics cannot be blamed for simply believing the movement higher that has been seen will see a return of gravity.  Ripple did in fact climb over 40 cents briefly this morning, which tested highs not seen since the 27^th, but the slight downturn since hitting the short term high has not proven long lasting. The broad cryptocurrency market has shown some resilient movement this morning as the major digital assets have fought off of lows.

The current resistance level of 40 cents may become important in the coming hours. If this level continues to act like a hurdle that is too hard to jump over and maintain value above, it could be considered a sign additional headwinds will start to blow again for XRP/USD. The bearish trend remains in full effect and while hopeful bullish traders cannot be blamed for wanting to see a strong reversal higher that is sustained, betting on this accomplishment could prove to be costly if choppy conditions persist.

Bullish traders who insist on looking for upside may want to use current support levels as a lynchpin to ignite their short term long positions while aiming for 40 cents. The 39 and a half, and perhaps the 39 and a quarter cents ratios could be a place to try and look for slights reversals. However if the 39 cents mark were to suddenly prove vulnerable it will likely mean another test of lower depths are about to be explored again. XRP/USD remains near rock bottom long term prices.

For traders who remain sellers and are looking for downside, short term wagers are encouraged too within the present trading landscape. Stop loss orders are urged and conservative leverage is recommended. If XRP/USD was to break the 39 cents mark below and starts to show price velocity, it is the 38 cents level which would need to be keenly watched. If prices are not able to be sustained above 38 cents in XRP/USD it would be a negative trading signal technically.

Ripple Short-Term Outlook

Current Resistance: 0.40150

Current Support: 0.39295

High Target: 0.40880

Low Target: 0.38140

The Euro has bounced ever so slightly during the trading session on Friday, limping into the weekend. At this point, the market looks as if it is ready to go much further, but we may get a short-term bounce in the meantime. This would make a certain amount of sense considering that we have just broken through massive support, and maybe getting a little bit oversold from the short-term perspective.

On the upside, the 1.05 level is where we had broken down from, so would make quite a bit of sense to revisit that area. Between there and the 1.06 level I would anticipate seeing a lot of noise and resistance, so I will be looking for an exhaustion candle in that region to start shorting again. After all, the US dollar continues to be like a wrecking ball against almost everything, as it is by far the strongest currency out there.

The European Central Bank has a lot of issues right now, not the least of which will be trying to protect an economy that is having issues with energy. That almost certainly means a slowdown, so at this point, I would be cautious about trying to play any bounce. On the other side of the Atlantic Ocean, you have the Federal Reserve which is more than willing to get hawkish and tighten the screws on monetary policy. With that being said, this is a market that is on a one-way path to lower pricing.

You want to look for some type of value when buying a currency, and this is a perfect example of that. Simply jumping in and shorting this market right away is somewhat reckless, although it almost certainly is the right thing to do over the longer term. I will be looking for that bounced offer “cheap US dollars” that I can pick up value based upon.

Given enough time, I believe that this market could go to the parity level, although that is a major psychological area that will attract a ton of attention. This does not necessarily mean that it happens quickly, but unless the Federal Reserve changes its overall tune, not to mention the ECB, there is almost no reason to think that we will not make it sometime in the next several weeks, or perhaps couple of months.

Gold markets have fallen rather hard during the trading session on Friday to reach down to the $1800 level. The $1800 level is an area where we have seen a lot of noise in the past, and where we had taken off from. Because of this, is very likely that the market will be looking for this area as an opportunity to stabilize, so it will be interesting to see how this plays out. If we can break above the top of the candlestick, then it is possible that we could go looking to the 200 Day EMA at the $1860 level.

The market continues to see a lot of noisy behavior, mainly due to the US dollar strengthening. The US dollar strengthening and then of course interest rates rising in the United States will continue to be a major sell-off in the bond market. As long as the interest rates in America continue to rise, it is possible that the gold market continues to suffer. However, in the last couple of days, we have seen the bond market rally a bit, and that could be the beginning of something. It would tie in quite nicely at the $1800 level, so it is likely that we will see some type of reaction.

If we do break down below the lows of the day, that could open up a bit of a trapdoor and send this market much lower. In that scenario, we would probably have massive movements in the bond market, and of course the US dollar. That being said, even if we are trying to form a little bit of a bottom in this area, it is going to take some time. With that in mind, I think you are looking at short-term trading at best, and you will have to keep in the back of your mind that there is a lot of potential noise out there when it comes to geopolitics, inflation, and numerous other issues in the currency markets. Because of this, you need to be very cautious about your position sizing and recognize that if the trade is working against you, you need to get out of the way quite quickly. Gold can be very volatile, and one has to wonder whether or not we rallied a bit late on Friday due to profit-taking?