Home / Technical Analysis / Weekly Forex Forecast: September 21, 2020

Weekly Forex Forecast: September 21, 2020

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Major Stock Indices Overview

S&P 500 US Index

The S&P 500 index fell -0.64% and closed at 3315.75 last week. The other major indices also clsed lower: NASDAQ index fell -0.56% and the Dow industrial average fell -0.03% making the S&P 500 index the weakest of the majors.

The index retraced back down to 3353.16 level (38.2% fib.) and bounced back up to test the supply zone around 3403.41-3445.60 levels. Then price moved lower to break the previous low of the week and closed at 3315.75 level.

The S&P 500 index is trading between the 50 and the 100 moving averages. The 100 MA is acting as a strong support level for the index to stay above the 3200 levels.

If the index continues to show bearish momentum, the next potential target for this week is to test the 3204.44 level (61.8% fib.). If the index finds enough bulls to push prices higher, then a retest of the 3403 level is a potential target on this market.

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FTSE 100 Index

The UK’s FTSE 100 index fell -0.2% last week and closed below the 6000 level. The major European indices were also ending the session lower with German DAX -0.6%, France’s CAC -0.8% and Italy’s FTSE MIB -1.2%.

The UK’s index found resistance at 6046.2 level and moved back down to close at 5970 level. The index is trading below the 50 and the 100 moving averages crossing over to confirm a bearish momentum to the downside.

The next potential target on this market is to test the 5841 level if we get more bearish confirmation. Otherwise, the market will try to break above the 6046 level and move higher to test the 6277 level.

Nikkei 225 Index

The Nikkei 225 index fell -0.2% last week and closed at 23095. The index has been moving up but failed to break the previous high. The index is trading above the 50 moving average that acts as a support level.

If the index breaks below the trendline, the next potential target is to test the demand zone around 22189-22545 levels. Otherwise, price will continue to move higher and try to break above the previous high. The next potential targets are the 23495 and 23999 levels.

Forex Market Forecast

US Dollar Index

On the daily chart, DXY is trapped inside a narrow range between 92.67 and 93.87. As price is low in the curve and moving down, we wait until price tests the supply zone around 94.67-95.36 levels to short the US dollar index.

A short-term trade opportunity is to go long from current price and exit at 93.36 level.

Price could also break below the 92.67 level to test the demand zone around 91.69-92.39 levels before moving up to test the 94.67 level.

The COT report shows more bears than bulls with 23.5% net long positions versus 50% net short positions.

EURUSD

On the daily chart, price is still moving sideways between 1.16950 and 1.20310 and broke below the previous low.

If price re-tests the demand zone around 1.16950-1.17810 levels and starts showing bullish evidence to the upside, we go long. If not, we wait until it corrects and tests the demand zone around 1.13940-1.14640 levels to go long.

Two key levels to watch: 1.16937 and 1.14944 as they are 38.2% and 61.8% fibonacci levels respectively.

The COT report shows more bulls than bears with 10.2% net long positions versus 7.3% net short positions.

GBPUSD

On the daily chart, price tested the demand zone around 1.26430-1.27590 levels and showed enough bullish evidence to the upside. Then price reacted to the supply zone around 1.29600-1.30360 levels and showed strong bearish evidence.

If price continues to show bearish momentum to the downside, price is expected to test either the 1.28830 or 1.25900 levels. If we get strong bullish confirmation at one of these levels, we go long.

The COT report shows more bulls than bears with 27.2% net long positions versus 18.7% net short positions.

AUDUSD

On the daily chart, price is moving sideways between 0.71970 and 0.73570 levels. Price could go down to re-test the demand zone around 0.71470-0.71970 levels to go up again and break above the 0.73570 level. The next potential target is at 0.75610 level.

If price doesn’t break below the previous low and starts moving up, we wait to see if the supply zone holds before going long on this market. If the supply zone holds, we wait for the correction to end to go long.

The COT report shows more bulls than bears with 31.9% net long positions versus 10.2% net short positions.

NZDUSD

On the daily chart, price tested the daily supply zone around 0.67870-0.68490 levels and showed bearish evidence to the downside.

The next potential target is to test the demand zone around 0.66360-0.66780 levels. And if price breaks below this zone and continues to show bearish momentum, the next target is the 0.65220 level.

The COT report shows more bears than bulls with 33.9% net long positions versus 39.5% net short positions.

USDCAD

On the daily chart, price tested the demand zone around 1.30640-1.31200 levels and kept moving sideways. If price manages to break above the previous high, we go long to test the 1.33890 level.

The COT report shows more bulls than bears with 27.8% net long positions versus 12.9% net short positions.

USDCHF

On the daily chart, price tested the demand zone around 0.89970-0.90530 levels and showed some bullish evidence to the upside.

The next move is to test the supply zone around 0.91590-0.91990 levels and go short once we get bearish confirmation with a target at 0.90530 level.

The COT report shows more bears than bulls with 10.7% net long positions versus 32.2% net short positions.

USDJPY

On the daily chart, price created a new supply zone around 105.970-106.300 levels and showed strong bearish evidence to the downside.

If price tests the demand zone around 101.200-103.940 levels and shows enough bullish evidence, we go long.

The COT report shows more bulls than bears with 22.9% net long positions versus 17.1% net short positions.

Commodities

Gold

On the daily chart, price is moving sideways between 1921 and 1983 levels.

If price re-tests the 1921.84 level and shows enough bullish evidence to the upside, we go long. Targets are 1983 and 2024 levels.

Crude Oil

On the daily chart, Crude oil created a new demand zone around 36.64-37.74 levels and showed strong bullish evidence to the upside. If price tests the supply zone around 42.44-43.76 levels and shows enough bearish evidence, we short.

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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