Home / Technical Analysis / Weekly Forex Forecast: October 5, 2020

Weekly Forex Forecast: October 5, 2020

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Major Stock Indices Overview

S&P 500 US Index

The S&P 500 index rose by +1.52% last week closing at 3345. The index is moving sideways between 3204 and 3402 levels and still trading below 50 moving average.

The index didn’t break above the previous high, which might suggest a potential downside movement this week in the US equity market. If price breaks below the 100 moving average, the next potential target is to test the 200 moving average.

FTSE 100 Index

The UK’s FTSE 100 index rose by +1.02% last week closing at 5877. The index tested the demand zone around 5742-5841 levels and kept moving sideways unable to break the previous high.

The EU and UK are agreeing on intensifying Brexit negotiations. This could have a positive impact on the UK’s index pushing it higher to test the 6016 level.

Nikkei 225 Index

The Nikkei 225 index fell by -0.75% and closed at 23185 last week. The index tested the supply zone around 23495-23999 levels and showed enough bearish evidence to the downside.

The index didn’t make a new lower low and still trading above the 50 moving average. This could suggest a potential break above the 23495 level to test the 24328 as a long-term potential target.

Forex Market Forecast

US Dollar Index

On the daily chart, DXY tested the supply zone around 94.670-95.360 levels and showed enough bearish evidence to the downside.

If price continues to move down, the next potential targets are 93.180 and 92.390 levels. If price retraces back up, we wait until it re-tests the supply zone and shows some bearish evidence to short.

The COT report shows more bears than bulls with 18.7% net long positions versus 48.5% net short positions.

EURUSD

On the daily chart, price created a new demand zone around 1.16090-1.16440 levels and showed enough bullish evidence to the upside.

If price retraces back down to either 1.16440 or 1.15640 levels and shows enough bullish confluence, we go long. If price continues to move higher without correcting, we wait until it breaks the previous high to go long.

The COT report shows more bulls than bears with 11.8% net long positions versus 7.3% net short positions.

GBPUSD

On the daily chart, price tested the supply zone around 1.29120-1.29990 levels and showed weak bearish evidence to the downside. Price didn’t break above the previous high suggesting a potential bearish momentum that could push price lower to re-test the 1.27300 level.

If price breaks above the 1.29990 level, we wait until it tests the 1.32360 level and shows some bearish evidence to go short.

The COT report shows more bulls than bears with 23.9% net long positions versus 19.3% net short positions.

AUDUSD

On the daily chart, price tested the demand zone around 0.69580-0.70230 levels and showed strong bullish evidence to the upside.

Price didn’t break above the previous high suggesting a continuation of a bearish momentum pushing price lower to re-test the 0.70230 level.

The COT report shows more bulls than bears with 32.7% net long positions versus 10.4% net short positions.

NZDUSD

On the daily chart, price tested the demand zone around 0.64850-0.65390 levels and showed enough bullish evidence to the upside. Price then tested the supply zone around 0.66290-0.66870 levels.

If this supply zone holds, price will move down and re-test the 0.65390 level, if it breaks above 0.66870 level, the next target is to test the 0.67520 level above current price.

The COT report shows more bears than bullsh with 33.8% net long positions versus 37.6% net short positions.

USDCAD

On the daily chart, price tested the supply zone around 1.33890-1.34590 levels and showed some bearish evidence to the downside.

If price retraces back down to 1.32000 level and shows enough bullish evidence, we go long.

The COT report shows more bulls than bears with 34.6% net long positions versus 12.6% net short positions.

USDCHF

On the daily chart, price tested the supply zone around 0.92970-0.93510 levels and showed enough bearish evidence to the downside.

If price retraces back down, we wait until it tests the 0.91120 level and shows some bullish evidence to go long. If price continues to move higher without pulling back, we go long with targets at 0.92970 and 0.93800 levels.

The COT report shows more bears than bulls with 11.5% net long positions versus 38.4% net short positions.

USDJPY

On the daily chart, price moved sideways with a potential bullish momentum to the upside. If price retraces back down to test the 104.690 level and shows some bullish evidence, we go long with target at 106.040 level.

The COT report shows more bulls than bears with 17.7% net long positions versus 16.9% net short positions.

Commodities

Gold

On the daily chart, gold created a new demand zone around 1848.11-1867.77 levels and showed some bullish evidence to the upside.

Price then went up and tested the supply zone around 1900-1919 levels. If this supply zone holds and price starts moving down, the next potential targets are the 1867 and 1811 levels. If price breaks above the 1919 level, we wait until it test the 1946 and get some bearish evidence to go short.

Crude Oil

On the daily chart, Crude oil tested the supply zone around 40.75-41.49 levels and moved lower re-testing the demand zone around 34.24-36.52 levels.

Price is expected to keep moving lower to test the demand zone around 31.38-33.53 levels. If price starts showing some bullish evidence at that level, we go long.

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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