Home / Technical Analysis / Weekly Forex Forecast: September 7, 2020

Weekly Forex Forecast: September 7, 2020

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Major Stock Indices Overview

S&P 500 US Index

The S&P 500 index fell by almost 3% last week despite the fact that the data was generally positive. The market was crushed by waves of selling that soon happened after the market opened and showed some upside momentum.

The index broke the supply zone around 3353.16-3398.03 levels and moved up creating a new record high around 3586. Then, a new supply zone was created around 3528.01-3586.45 levels. The S&P 500 retraced back down to 3353.16 level (38.2% fib.) and showed evidence of market indecision.

The index is still trading above the 50 and the 100 moving averages. If price shows enough bullish momentum this week, the next potential target is to test the 3528.01 level. If price breaks below 3353.16 level, the next target is the 3204.44 level (61.8% fib.).

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FTSE 100 Index

The European indices also got hit by the tumble in the US indices. The UK’s FTSE 100 fell by -3.5% last week against the German DAX -1.8% and the France’s CAC 40 by -1.05%.

The FTSE 100 tested the supply zone around 6277.5-6381.6 levels and moved down in a nice downtrend. Then price tested the demand zone for the second time and couldn’t close above the 5841.1 level. The index is now trading below the 50 and 100 moving averages.

If price breaks below the 5742 level, the next potential target is the 5572.3 level. If market opens above the 5841.1 level and shows enough bullish evidence, we expect the FTSE 100 to keep moving sideways between 5841 and 6277 levels.

Nikkei 225 Index

The Nikkei 225 index closed at 23205.43 with a gain of +1.41% last week. The index tested the supply zone around 23495-23999 levels and showed enough bearish evidence to the downside. The Nikkei 225 moved down and tested the 22872 level (38.2% fib.). The index is still trading above the 50 and 100 moving averages.

If the index continues to move higher, the next target is to re-test the 23495 level. If price breaks below 38.2% fib., the next target is the 22412 level.

Forex Market Forecast

At the end of the US session last week, all of the euro, pound, yen, and dollar finished the session unchanged. Except for the Canadian dollar that moved higher despite the plunge of the oil market.

US Dollar Index

On the daily chart, the DXY is moving sideways between 91.760 and 93.370 levels. If price breaks above the 93.370 level, the next target is to test the supply zone around 94.680-95.360 levels.

If price couldn’t break to the upside, the next target is to re-test the 91.760 level as DXY will continue moving sideways.

The COT report shows more bulls than bears with 42.8% net long positions versus 39.2% net short positions.

EURUSD

On the daily chart, price moved sideways between supply and demand zones. As price continues to create new higher highs and higher lows, we expect the market to correct before moving above the 1.20310 level.

If price breaks below the 1.16950 level, the next potential target is the 1.14951 level.

The COT report shows a drop in net long positions suggesting a market correction with 12.3% net long positions versus 7.8% net short positions.

GBPUSD

On the daily chart, price tested the supply zone around 1.33320-1.35070 levels and showed some bearish evidence to the downside.

The price tested the demand zone around 1.31560-1.32190 levels and showed some bullish rejecting. We expect to see more bullish momentum this week on the pound dollar.

If price continues to move higher, the next potential targets are the 1.34421 and the 1.36049 levels.

The COT report shows more bulls than bears with 21.6% net long positions versus 19.1% net short positions.

AUDUSD

On the daily chart, price tested the supply zone around 0.73850-0.74520 levels and showed enough bearish evidence to the downside.

This could be a correction as we expect the price to continue moving up to test the supply zone around 0.75510-0.76260 levels.

The next potential targets on this market are the 0.74961 and the 0.76663 levels.

The COT report shows more bulls than bears with 29% net long positions versus 21.5% net short positions.

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NZDUSD

On the daily chart, price tested the supply zone around 0.67870-0.68490 levels and showed some bearish evidence to the downside. Price then retraced back down to 0.66767 level and showed some bullish rejection.

The next potential target on this market is to test the 0.68483 level.

The COT report shows an increase of long positions from last week with 35.9% net long positions versus 39.8% net short positions.

USDCAD

On the daily chart, price tested the demand zone around 1.29530-1.30000 levels and showed bullish evidence to the upside.

Price might retest the demand zone and if we get enough bullish evidence, we go long to test the 1.32210 and the 1.33110 levels.

The COT report shows more bulls than bears with 34.9% net long positions versus 13.9% net short positions.

USDCHF

On the daily chart, price tested the demand zone around 0.89330-0.90130 levels and showed strong bullish evidence to the upside.

If price tests the supply zone around 0.91740-0.91970 levels and shows enough bearish evidence, we go short to retest the 0.90130 level.

If price breaks above the 0.91970 level, we wait until it tests the supply zone around 0.92970-0.93510 levels to short the dollar swiss franc.

The COT report shows more bears than bulls with 10.3% net long positions versus 33.1% net short positions.

USDJPY

On the daily chart, price is moving sideways between 105.040 and 106.800 levels.

If price tests the 106.594 level and shows bearish evidence to the downside, we short with potential targets at 105.380 and 104.627 levels.

The COT report shows more bears than bulls with 14.5% net long positions versus 15% net short positions.

Commodities

Gold

On the daily chart, Gold is moving sideways between 1921 and 1974 levels.

If price breaks below the 1921.84 level, the next potential targets are the 1887.44 and 1807.18 levels.

If price shows some bullish evidence to the upside at the open, we wait until it breaks above the 1974.96 level to go long with a potential target at 2025.18 level.

Crude Oil

On the daily chart, oil finally broke the support level and started moving down breaking below the $40 level. The next potential targets on this market are 37.77 and 34.44 levels.

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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