Hi Traders! Forex Weekly Forecast Text Format August 9th to August 14th 2020 is here. This is Yordan and I will be covering this week’s forecast for Vladimir. In terms of trading style don’t be surprised if you see some slight difference in some of the things. But overall I believe you will be enjoying this analysis.
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On the daily chart the price has created a bullish trend pattern from the beginning of mid March. Once we started the bearish sign forming in the form of a bearish divergence we started following this pair for actual pullbacks to be delivered.
On the H4 chart, there is a potential head and shoulders pattern (Personally I feel it’s not the most reliable pattern but regardless the current structure is resembling head and shoulders pattern) that might be forming here. At the end of the day if there are people who will be trading this pattern to the downside then there will be momentum being created. Since this pattern fits our analysis from the daily chart, the H4 chart starts to become a really interesting opportunity for the sells. Most importantly the previous swing high from the first shoulder was not broken here and the price has bounced off from that level. So I will be following the green dashed line (neck line) shown in the screenshot below.
On the H1 chart, after the ABCD pattern the first attempt by the price to break below the most recent uptrend line failed and then the price pushed higher. Now the uptrend line is updated and a valid breakout below this uptrend line would be a good sign for the bears. Also as shown in the screenshot below we have a bearish impulse followed by pullbacks and based on it we may expect the price to continue lower further.
Based on all this my view is bearish here and we may look for sell opportunities with bearish evidences. The red arrow mark shown in the screenshot below is the valid low of the last bearish divergence and breakout below this low would be very beneficial sign for the bears.
Also keep in mind that if the price is creating a double wave down (in other words some sort of ABCD pattern) the 100% fibonacci expansion level coincides on a strong area. So if the price moves lower and reaches this zone then keep an eye for the bullish evidences and if we get it then consider managing your trade.
Also based on the assumption of a head and shoulders pattern if we get a valid breakout below the neckline then there is a good chance for the price to reach the 0.93 zone. Also, the invalidation for the bearish view would be the last swing high (marked in red line) shown in the screenshot below.
In this pair on the weekly chart the price has reached an important level.
On the daily chart we had an impulse followed by pullbacks and the corrective structure is broken and a continuation is now happening. So we may expect the price to reach the 1.1080 zone approximately.
In my POV there are two possible scenarios here. Generally once the price reaches the good level there are usually two things that will happen. The first one is that the price moves inside a consolidation (kind of a flat movement) for some time. We may then expect a breakout above this consolidation and then focus on pullbacks and buys with bullish evidences.
Or alternatively if the price didn’t gain momentum at this place and if the breakout is not going to happen. Then very likely we are going to see some kind of false break and the price testing the same zone. And likely on the lower timeframe we are going to see some slow down, false breaks, reversal patterns and then the price is going to push lower for deeper pullback. Personally as long as the zone (marked in red) shown in the screenshot below holds any down move would be considered as a pullback that gains the momentum for the breakout.
We have a strong resistance zone which is slightly above the current market price (which is already a test zone as the price is few pips away from the bottom of this zone). The price is currently near this zone so try to avoid buying near the resistance zone as the risk-reward will be bad. We need to see the price moving below for pullbacks and then we may look for buys with bullish evidences. Or alternatively wait for the price to break above the resistance zone, look for pullbacks and then we may look for buys with bullish evidences.
On the weekly chart we have a good downtrend line and we can see that currently the price is trying to break above it.
Zooming in a bit we can see that we actually got a spike and the second week which is attempting to go higher has also got a spike. This tells us that the bulls are being rejected. I also see an extremely strong level which the price has managed to break and close above but the spikes on the downtrend line are telling us a different story. Without digging any deeper I already see the possibility of a flat move here before further continuation higher to gain the momentum. Or alternatively we may look for pullbacks before we get a valid breakout above this downtrend line. In my POV this looks more logical than to directly expecting the price to continue higher further.
On the daily chart based on the last move to the upside, I basically expect the price to continue further higher. We can also see that the bearish divergence is missing on moving averages of the MACD and RSI indicator. The only place we see bearish divergence is on the histogram.
Also as I said earlier the price is in an important level and I would be expecting the price to give us some pullbacks here.
On the H4 chart, there are two possible scenarios here. The first possible scenario here would a range as I expect the price to move inside a range without breaking below the bottom of it until we finally get a valid breakout.
Alternatively, the price has already created a double top and if the price breaks below the zone shown in the screenshot below (we can spot some very nice levels on the way as shown in the screenshot below which we may talk about later on) we may then expect the price to continue lower.
Basically I would be focusing on the support level shown in the screenshot below.
We already had one attempt for a sell that managed to pay already. Since that move down is more or less going to be finishing soon unless we create a five-leg structure which I think is likely going to happen. Even if that happens then pullbacks at the bottom (aggressively) could be bought.
If you would like to stick to more conservative approach then wait for this impulse to form. Ideally, the fifth wave of this impulse is going to be breaking below the support zone shown in the screenshot below around the 1.17 level and then we may expect pullbacks and further continuation lower.
Overall in the midterm, I expect bearish moves to happen here. If you like scalping you may try to scalp the end of the bearish wave shown in the screenshot below for some quick pullbacks before possible continuation lower.
On the daily chart we can see that the price has currently reached the 61.8% fibonacci expansion level of the first wave and the bearish divergence is in play. This means that the price is in a good level where we might get some pullbacks. Short term pullbacks are possible here but we need to look for confirmations on the lower timeframes.
On the H1 chart, we got one such confirmation in the form of a bearish convergence (it was not a best setup but it was technically correct). Now it will be interesting to see if the price would be gaining momentum with some kind of impulse here as shown in the screenshot below which can tell us to sell the pullbacks with more bearish evidences.
In this pair the higher timeframes started to behave a bit rational and when this happens I would like to go to lower timeframes and look for short term intraday scalping. On the H4 chart, the price is currently moving inside a bullish channel. The two lines that you see at the top and bottom of this channel is the inner and extreme zones. Currently the price is at the bottom of this channel which means as long as this channel is holding and if we don’t get any breakouts to the downside. We may expect bounces and the price to continue higher. The risk-reward ratio in such cases is usually amazing.
The red and blue lines that you see in the screenshot above are based on two indicators created by me. The sole purpose of this indicators is to pick the strong resistance and supportive levels. We have the first daily level, second daily level and we have multiple levels based on the red lines based on the second indicator.
If we drop to the M15 chart we can see a cluster of red lines based on the second indicator which is coming to the exact zone and we can see clearly the price reacting of it. I am looking for extremely strong level which is in play, and I am looking for possible aggressive entries with divergence which is also in play. We also have a false break in play and we need to see the second move down is going to end but if it bounces then we may have a second false break. This could turn to be a very interesting opportunity and lets see how it plays out.
After the bearish move on the daily chart and we then got signs of pullback and currently, it looks like this pullback is happening.
On the H4 chart, we have an impulse and also the price has created higher highs. After the impulse we may expect pullbacks and then further continuation higher. The pullback that is happening now is limited as the price is near the 38.2% fibonacci retracement level of the first bullish leg and is testing it. Usually I like the price to go deeper towards the 50% or 61.8% fibonacci retracement level, this is because the lower you buy the better. The price is missing few pips for the 100% fibonacci expansion level of the first wave but the bullish divergence is in play and we already have false break. So in other words if we get a valid breakout above the most recent downtrend line, we may then expect the price to continue higher further.
Alternatively if we see the price bouncing from the downtrend line and moving lower then the price might develop a potential channel here. And we will be looking at the critical zone formed by the 1.27% fibonacci expansion level versus the 50% fibonacci retracement level with the next bullish divergence to form. From this critical zone the buys will be much better because I will be looking for aggressive buy setups from this zone and not based on the downtrend line breakout.
On the H4 chart, the price has broken above a strong resistance zone. We also had bullish divergence and also the price has created an impulse. Based on the current scenario we may look for pullbacks here and then further continuation higher.
We also have an extremely strong resistance zone on the way where the psychological level 2 coincides. We have the first false break here, people jump in and they clean the stops and the price creates an extreme divergence and then I expect a nice strong quick move to the downside. I might be wrong here but if it happens then it would be really perfect.
If it doesn’t then we already have one leg bearish divergence, we also have something like a breakout but its tricky here because of the spike. But overall the important zones at the top and bottom as shown in the screenshot below was broken.
Personally I feel that this pair is technically tricky and also on the H1 chart I don’t see an impulse. So this might be a bit more advanced setup and let’s not dig into it deeper anymore. The bottom line here is that we wanted to see the price dropping and once it does we may then look for buys with bullish evidences.
In this pair on the daily chart I am following the strong resistance zone shown in the screenshot below. The price has more or less reached the bottom of this zone and the previous spike is just few pips below. The larger view here is not very clear to me besides the level which is more than enough for me to trade.
Dropping down to the H4 chart I could see that after the bullish move to the upside the price is currently moving inside a range. If there is no double top with bearish divergence and most importantly until the support zone (marked in yellow line) holds, I would be looking for potential bullish opportunities on lower timeframes versus the top first of all and then the next level which is 50 pips away.
So on the whole in my opinion price still has room for one more push higher before any major pullbacks. Alternatively, if the price breaks below the strong support zone we may then expect the price to push lower. If anything of that sort happens we will then talk about it later adapting to that situation but as for now I am going to focus only on the buys.
On the weekly chart the price is moving inside a bearish channel. The last time where it almost touched the bottom of this channel we got bullish divergence with two false breaks and then we got an amazing move to the upside. The price broke above the last high and this breakout came with bullish convergence based on the MACD indicator. The price pushed up higher and currently there is a possibility for the price to create the movement as shown in the screenshot below.
The key part of the image is the pullback because this kind of pullback on the weekly chart is a miniature trend on the lower timeframes. This means sells could be very well expected.
Moving down to the daily chart we could see that we have two bearish divergences. We also have cycles which we can measure in different ways. While measuring them we have levels around the zone as shown in the screenshot below and we also have false breaks. After the tiny consolidation period and the attempt to go higher, we got immediate rejection. Currently the price is trying to break below this consolidation then we got the push up. The bottom line here is that I personally expect the price to provide here some pullbacks. Which means in the upcoming week as long as the top shown in the screenshot below is holding, specifically the critical zone which is somewhere at the middle of this consolidation. As long as this critical zone holds I will be expecting the price to push lower.
On the H4 chart, we do have the bearish hidden divergence (it might not be an ideal one) but when we put the facts together sells are making a lot of sense here. In terms of levels for the targets we have a critical zone around 0.8750. Also while measuring the first wave using the fibonacci expansion tool we could see that the 61.8% fibonacci expansion level is just few pips above the top of this critical zone. And the 100% fibonacci expansion level is at the extremes of this zone. That’s why when we see the average we get the 0.8750 level.
On the daily chart we saw some bullish moves which was blocked in the area shown in the screenshot below. Then the idea of possible ABCD pullback before possible continuation higher started becoming a very decent opportunity.
On the H4 chart after the bearish move to the downside the price started moving inside a consolidation. Then we got an impulse for possible first wave after this impulse I wanted to see the price providing pullbacks which it did. Then I wanted to see the price going lower, which it probably started doing so last week. There are three important levels on the way which are derived from the fibonacci expansion levels of the big and small waves we have. If you are looking for sells then keep in mind about these levels. If you get any signs against, around these levels then you should consider managing your trade.
Looking at the daily chart it looks like the price wants to give us pullbacks. We got a bearish divergence after the bullish pattern, so we may expect a possible ABCD correction.
Dropping down to the H4 chart we did get some kind of impulse here. This impulse if we are expecting it to create two waves down is now supposed to give us pullback to the upside.
This pullback down is supposed be an impulse on its own on the lower timeframes. On the H1 chart, we got the impulse to the upside and then the price is stuck inside a range, and until the bottom of the range holds, it is something to look forward to buy. Then once the kind of move shown in the screenshot below is completed then we are probably going to continue lower with reversal signs (according to your reversal signs and setups that you are following).
So on the short term I do expect the price to move a bit more higher to the upside and then the price to continue possibly lower.
On the H4 chart, the price has created a double wave to the downside. The way it started developing it looked like a possible triangle pattern but it broke below and created an ABCD pattern and I expect the price to continue higher once this pullback completes itself.
On the H4 chart, we already have a bearish divergence in play.
On the daily chart we have a bullish trend pattern so pullbacks would not be something surprising.
On the other hand looking at the weekly chart we could see that the price is breaking above the downtrend line so there is a good chance for the price to push even a bit higher. The momentum is now in play and the price might be aiming the high shown in the screenshot below before deeper pullbacks.
I really have no clue how it is going to play out that’s why we follow the technical analysis and based on that we already have reasons for pullbacks. If the pullback is provided then I would definitely be paying attention to the trend line and also to the important zone (9k vs 10.4 k) shown in the screenshot below. So we may expect pullbacks and then further continuation higher.
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Note: Bullish evidences could be in the form of candle stick patterns, false breaks, trend line breakout etc… supporting the bullish view and bearish evidences could be in the form of candle stick patterns, false breaks, trend line breakout etc… supporting the bearish view.
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