Home / Technical Analysis / Weekly Forex Forecast: October 12, 2020

Weekly Forex Forecast: October 12, 2020

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Major Stock Indices Overview

S&P 500 US Index

The S&P 500 index rose by +3.84% and closed at 3478 last week. The other major US indices also closed higher last week with NASDAQ index rose +4.56% and Dow industrial average index rose +3.27%.

As the S&P 500 index approaches the supply zone around 3528-3584 levels, we expect to see some correction to the downside for next week. The index might correct down to 3387 level before retracing back up again.

The main fundamental driver for the market next week would be the stimulus deal package.

FTSE 100 Index

The UK’s FTSE 100 index rose by +2.00% along with German DAX +2.8% and the France’s CAC +2.4% last week.

The FTSE 100 index is now testing the supply zone around 6016-6095 levels and showed some bearish momentum last Friday. The overall trend on this market is still bearish as the index is trading below 200 moving average.

If the index breaks above this supply zone, the next potential target would be the 6277 level. Otherwise, more bearish momentum will drive prices lower to re-test the 5841 level.

Nikkei 225 Index

The Nikkei 225 index rose by +2.56% and closed at 23565 last week. The index is supported by the 50 and 100 moving averages.

The index is still trading inside the supply zone around 23495-23999 levels. If the index breaks above this supply zone, we will have new higher highs created next week. Otherwise, we will have a correction to the downside to 22545 level.

Forex Market Forecast

US Dollar Index

On the daily chart, DXY is creating new supply zone around 93.490-93.960 levels suggesting a bearish momentum to the downside.

If the index tests the demand zone around 91.690-92.390 levels and retraces back up, wait for bearish evidence at 93.490 level to short.

If price breaks below 91.690 level, the next potential target is the 90.820 level.

The COT report shows more bears than bulls with 19.2% net long positions versus 49.2% net short positions.

EUR Index

On the daily chart, EUR index tested the supply zone around 1.36330-1.37010 levels and showed strong bearish evidence to the downside. If the index breaks the trendline, the next potential target would be the demand zone around 1.33520-1.34200 levels.

The overall sentiment is bearsih.

The COT report shows a reduction in long positions with 10.5% net long positions versus 7.8% net short positions.

JPY Index

On the daily chart, JPY index created a new supply zone around 101.410-101.740 levels and showed strong bearish evidence to the downside. The next potential target is the 99.020 level.

The overall sentiment is bearish.

The COT report shows more bears than bulls with 15.9% net long positions versus 18.4% net short positions.

EURUSD

On the daily chart, price is approaching the supply zone around 1.18380-1.19010 levels. If we get enough bearish evidence to the downside, we short the EURUSD.

If price breaks above the 1.19010 level, we wait until it tests the 1.19450 level and short with confirmation.

The next potential targets are 1.16440 and 1.15640 levels.

The COT report shows a reduction in long positions with 10.5% net long positions versus 7.8% net short positions.

GBPUSD

On the daily chart, price created a new demand zone around 1.28450-1.29370 levels and showed strong bullish evidence to the upside.

The next potential target is the 1.32360 level.

The COT report shows more bulls than bears with 25.9% net long positions versus 20.1% net short positions.

AUDUSD

On the daily chart, price created a new demand zone around 0.70960-0.71360 levels and showed strong bullish evidence to the upside.

The next potential target is to test the 0.73570 level.

The COT report shows more bulls than bears with 35.8% net long positions versus 11.3% net short positions.

NZDUSD

On the daily chart, price created a new demand zone around 0.65420-0.65880 levels and showed strong bullish evidence to the upside.

If price tests the supply zone around 0.67220-0.67970 levels and shows some bearish evidence, we short. The next potential target is the 0.65880 level.

The COT report shows more bears than bulls with 34.8% net long positions versus 40.1% net short positions.

USDCAD

On the daily chart, price tested the demand zone around 1.30640-1.31200 levels. If we get enough bullish evidence at this zone, we go long to re-test the 1.33890 level.

If price breaks below the 1.30640 level, we wait until it tests the 1.30000 level and shows enough bullish evidence to go long.

The COT report shows more bulls than bears with 34.9% net long positions versus 10.7% net short positions.

USDCHF

On the daily chart, price tested the supply zone around 0.92950-0.93510 levels and showed bearish evidence to the downside. The next potential targets are 0.90130 and 0.88170 levels.

The COT report shows more bears than bulls with 7.7% net long positions versus 34.1% net short positions.

USDJPY

On the daily chart, price tested the supply zone around 106.040-106.300 levels and showed strong bearish evidence to the downside.

If price tests the 105.310 level and shows enough bullish evidence, we go long.

If price continues to move down and breaks below the 104.940 level, we wait until it tests the 104.690 level to go long.

The COT report shows more bulls than bears with 18.4% net long positions versus 15.9% net short positions.

EURGBP

On the 4-Hour chart, price tested the supply zone around 0.91570-0.91830 levels and showed enough bearish evidence to the downside.

The next potential target is the 0.89920 level.

The COT report shows more bears than bulls with 26.5% net short positions.

Commodities

Gold

On the daily chart, Gold is moving higher creating a new demand zone around 1872-1895 levels. The next potential targets on Gold are 1946 and 1983 levels.

Price might retrace back down after testing the supply zone around 1946-1959 levels.

Crude Oil

On the daily chart, price created a new demand zone around 39.09-39.99 levels and showed some bullish evidence to the upside. If price retraces back dow to test the 39.99 level, we go long. The next potential target is the 42.44 level.

If price doesn’t break above previous high and trades below 39.09 level, the next target is the 36.52 level.

Risk Disclaimer: By viewing any material or using this weekly forex forecast within this site, you agree that it is general educational material and you will not hold anybody or entity responsible for loss or damages resulting from the content provided here by “TradingFXHub”. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The results found in this weekly forex forecast are based on simulated or hypothetical performance results that have certain inherent limitations. Individual results vary and no representation is made that clients will or are likely to achieve profits or incur losses comparable to those that may be shown.

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