Risk disclaimer

The content in the weekly analysis is based on years of accumulated experience and knowledge of professional fund managers. They shares their views on the weekly economic and market trend with Clients. This is aimed to enhance the Client’s awareness of the economic situation and the market conditions. Clients understand and acknowledge that the purpose of this weekly analysis is to educate and share opinions and not as an investment or trading advice. Clients must be responsible for their own investment and trading results.

Outlook for Week of 15 – 19 November 2021

The trader is a professional trader with institutional experience having worked in both banks and fund management companies.

His educational background is a Bachelors degree in Business Administration with a major in Finance.  His favourite subjects are banking and finance as well as psychology.  These subjects allow him to have an understanding into the behaviour of financial markets.

Treasure trader relies on fundamentals to initiate his trades whether they are trades in currencies, stock indexes or metals.  He then follows up with technical charting to identify entry and exit points where he can maximise returns taking on the appropriate risk.

The technical charting methods that the trader uses is also proprietary and he has developed this unique skill over many decades of observation of the markets.

Treasure trader’s objective is to target returns in excess of 50% per annum by taking on risk of up to 30% annually.

Chart 1A: USD INDEX WEEKLY CHART

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Rising inflation, Fed tapering and projection of a Fed rate hike in 3Q of 2022 caused the Dollar index to close strongly last week. The weekly technical resistance at 94.30 has broken and we also see a formation of a double bottom on the chart. With both fundamentals and technical moving in sync, we expect the Dollar index to rise further to test the next resistance at 97.16.

Chart 1B: USD INDEX DAILY CHART

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Dollar Index broke the resistance zone between 94.58 to 94.98 on the daily chart and is now set to test the next daily chart resistance at 95.87.

Chart 2A: AUDUSD WEEKLY CHART

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The neckline resistance for AUDUSD at 0.7530 remains strong on the weekly chart. Now that USD index has broken through resistance we expect AUDUSD to resume its downtrend. Support zone between 0.6862 to 0.6990 should however attract profit taking interest from short AUDUSD positions.

Chart 2B: AUDUSD DAILY CHART

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AUDUSD has formed resistance on daily chart at 0.7531 but we expect selling interest to emerge at the high of a key reversal point last Wednesday which is at 0.7393. Now that USD index has broken resistance and Dollar is expecting further gains we would expect selling interest in AUDUSD to emerge on rallies.

Chart 3A: GBPUSD WEEKLY CHART

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No change in view for GBPUSD. Technically GBPUSD is still in a shoulder head shoulder pattern and looking to trade lower on expectations of a stronger Dollar. Support zone on the weekly chart lies between 1.2853 to 1.2893.

Chart 3B: GBPUSD DAILY CHART

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In line with a stronger dollar, GBPUSD is continuing on a lower trend. Last Friday saw some reprieve in the selling pressure but expect selling to continue in the coming week.

Chart 4A: EURUSD WEEKLY CHART

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Last week saw a strong sell off in the EURUSD and with expectations of further Dollar strength we expect EURUSD to continue to trade lower towards the next support zone between 1.1216 to 1.1240.

Chart 4B: EURUSD DAILY CHART

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Last week the selling momentum of EURUSD accelerated and on the daily chart the path of least resistance looks lower with the next support only at 1.1300.

Chart 5A: USDJPY WEEKLY CHART

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Now that Dollar index has broken the weekly chart resistance we expect USDJPY to also trade higher. This may happen when prices close above the channel.

Chart 5B: USDJPY DAILY CHART

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USDJPY has been trading within a channel for the last several weeks but with stronger Dollar we expect to see a rally at some point especially if it closes above the previous high of 114.69.

Chart 6: AUDNZD WEEKLY CHART

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AUDNZD managed to close higher at the end of last week despite the initial sell-off from the beginning of last week. We still expect AUDNZD to continue its downtrend and expect rallies toward the high of two weeks ago at 1.0492 will be where we see renewed selling interest.

Chart 6B: AUDNZD DAILY CHART

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Resistance is now established at 1.0492 on the daily chart and rallies toward this level would see selling pressure. This is consistent with the weekly chart.

Chart 7A: EURNZD WEEKLY CHART

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EURNZD is consolidating after the break below the channel and previous low of 1.6320. So far rallies toward this level has met with selling interest and we continue to expect this currency pair to trade lower.

Chart 7B: EURNZD DAILY CHART

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No change in view for EURNZD. Probability is high for this cross to trade lower and any rallies should be contained first at 1.6301 followed by 1.6377 to 1.6404.

Chart 8A: EURCAD WEEKLY CHART

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No change in view for EURCAD. The previous weekly chart support at 1.4487 is now the resistance for this cross. While it is consolidating we expect that once it trades below the previous low of 1.4263 we would likely show a potential reverse flag formation which could lead to a substantial move lower.

Chart 8B: EURCAD DAILY CHART

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EURCAD continues to consolidate with selling pressure on rallies but profit taking closer to support at 1.4332.

Chart 9: BITCOIN DAILY CHART

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The break of resistance at 63070 on the 4-hourly chart saw a test of all time high of 68945 for Bitcoin. Subsequently profit taking has brought it back down to support zone on 4-hourly chart between 60898 and 63070. While Bitcoin still has room for further upside, the lack of momentum on achieving all time highs may see further profit taking closer to the previous high of 69000.

Chart 10: DOW WEEKLY CHART

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While the Dow continues to trade within an ascending trend channel, we may be close to exhaustion since Fed has announced the start of tapering. Also inflation is turning out to be not just a supply side issue and spreading to more sectors of the economy. The expectations of Fed rate hikes is now expected to happen earlier and thus we are wary of a market reversal.

SUMMARY:

  • US Dollar has finally broken weekly chart resistance at 94.30. There is now potential for Dollar to trade higher towards the next weekly chart resistance at 97.16.
  • AUDUSD has a strong neckline resistance on the weekly chart at 0.7530 and with a stronger Dollar we could see AUDUSD trade lower towards the next weekly chart support between 0.6862 to 0.6990.
  • AUDNZD closed strongly towards the end of last week which could see further rallies next week. However we see daily chart resistance at 1.0492 which is also the high of a key reversal on the weekly chart. As such we expect selling pressure on rallies toward 1.0492.
  • EURUSD closed lower toward the end of last week and the path of least resistance seems lower. Next support on weekly chart is between 1.1216 to 1.1240.
  • USDJPY could continue to trade within the channel on the daily chart but we expect USDJPY to also benefit on the strength of the Dollar once the previous high of 114.69 has been taken out.
  • EURNZD continues to face selling pressure on rallies toward 1.6320. We believe the trend for this currency pair is lower and it is in a consolidation phase currently.
  • Dow continues to trade in an ascending uptrend channel. But we are wary of a market exhaustion which could trigger a reversal in the short term. As such we stay neutral to slightly bearish.
  • Bitcoin managed to establish an all-time high last week of about 69,000 which is a whisker away from 70,000. Profit taking has set in with prices falling back to the lows 60,000 and we could see further consolidation between 57,000 to 67,000 for now.