Pairs in Focus This Week – GBP/USD, EUR/USD, USD/CHF

The GBP/USD has melted down during the course of the week as we have seen the Bank of England step away from its interest rate hiking cycle, suggesting that perhaps we are going to continue to see lackluster performance coming out of Great Britain. Furthermore, although the Federal Reserve held firm, it does look like the Fed is going to remain tight with its monetary policy, thereby favoring US dollar buying against most currencies, not just this one.

The EUR/USD initially tried to rally during the course of the trading we, only to show signs of resistance above. Ultimately, this is a market that I think continues to go lower, as we have ended up forming a significant inverted hammer. This suggests that we will continue to see downward pressure going forward, but I also recognize that this is a scenario where volatility continues to be a major issue. Regardless, this is a market that looks like it will eventually break down rather significantly. Things are starting to look rather ugly around the world, which will drive up the demand for US dollars.

The US dollar has rallied rather significantly against the Swiss franc during the trading week to break well above the 0.90 level. We are now facing the 50-week EMA and an area that has been resistant more than once. I think given enough time, we will probably get a bit of a pullback, but the buyers will return in order to break out to the upside over the longer term. A short-term pullback should be thought of as a potential buying opportunity in this environment. Interest rate differentials will continue to favor the US dollar, especially as the Swiss National Bank decided to hold rates flat this past week.

Despite the fact that oil has been massively bullish as of late, the Canadian dollar has seen itself give up quite a bit of strength against the US dollar this past week. That being said, this is a market that continues to see a lot of volatility is the 1.33 level underneath and the 50-Week EMA both offer potential support. Just above, we have the 1.38 level offering significant resistance, and I think we continue to go back and forth in this overall consolidation region.

Bitcoin rallied initially for the week but gave back the gains as it looks like crypto is yet again in the deserted wasteland of financial markets. Quite frankly, there is no real strength at this point in time, so I think we will continue to go sideways. That being said, I think the $26,000 level continues to be supported, and if we break down below there it could open up a move down to the $25,000 level. On a break above the top of the weekly candlestick, we could see a move toward the $30,000 level.

Gold markets have gone back and forth during the course of the trading week as we continue to form a consolidation triangle. All things being equal, the 50-week EMA underneath continues to offer support, and I think a lot of people will pay close attention to it. If we were to break above the down trending line above, that opens up a potential move to the $2000 level. On the other hand, if we break down below the 50-Week EMA, it’s very likely that the market will test the crucial $1900 level.

The NASDAQ 100 fell hard during the course of the week, slamming into a major support level at the 14,600 level. All things being equal, if we break down below there, then the market is likely to get looking to the 13,750 level. The fact that we are closing at the very bottom of the candlestick also suggests that there is probably some potential follow-through here, and it’s worth noting that central banks around the world suddenly have stopped raising rates, which is not a good sign for the underlying economy. Because of this, I think we probably have another week or two of negativity.

The US oil market has been very noisy this week, as we continue to dance around the $90 level. At this point, it would not surprise me at all to see a little bit of a pullback in the crude oil markets, but we still have a lot of issues out there when it comes to supply. Further exacerbating the situation, Russia has put another ban on diesel fuel, as the wheat harvest season is approaching. With all this, and the fact that Russia and Saudi Arabia had cut production by 1 million barrels a day suggests that eventually all dips will be bought into in this market.