Weekly Forex Forecast (23/10/23) EurUsd / XauUsd + Forex Trading Plan! [HD]

US Stocks on the Verge of a Major Breakdown: Implications for Forex Trading

US stocks are currently facing the risk of a major breakdown, which has significant implications for Forex trading. If this materializes, we can expect to see risk-off moves in the Forex market next week. Traders should be focused on risk-off setups, particularly long plays on the Swiss franc and the US dollar, as well as filtering Japanese yen shorts. This strategy will help traders avoid being on the wrong side of a potential volatility shock and take advantage of potential flight-to-safety moves in the market.

Top Forex Plays for Next Week

The Swiss franc once again emerges as the number one long play for next week, following its strong performance in the previous week. The Swiss franc pairs, particularly against the Aussie and New Zealand dollars, are expected to perform well in a risk-off scenario. Additionally, the pound and the euro against the US dollar and the Swiss franc should also be considered for potential trading opportunities.

Market Analysis: Crude Oil

Crude oil presents a dilemma for traders next week. While a risk-off event could lead to a sell-off in crude oil, the ongoing situation in the Middle East has the potential to cause a spike in prices. As a result, short-term trading in crude oil may not be attractive. However, if traders decide to trade this asset, they should focus on long positions and look for potential opportunities in the market.

Forex Pairs Analysis

Aussie Frank

Aussie Frank remains a favorite opportunity for traders next week. Any pullback in this market should be viewed as an opportunity to look for intra-week breakouts to the downside, with potential targets at 0.556. If there is no breakout, traders should consider a short-term sell opportunity if the market bounces and tests the 0.570 level.

New Zealand Frank

Similar to Aussie Frank, New Zealand Frank presents a favorable opportunity for traders. The market has shown strong momentum to the downside, and any correction should be viewed as a gift to look for potential breakouts towards 0.512. If the market continues to hold its trend and pulls back to test the 0.527 level, this would be the second place to look for a short-term sell opportunity.

Pound Frank

Pound Frank is another market that traders should consider for potential short opportunities. Any pullback in this market should be viewed as an opportunity to look for bearish breakouts towards 1.750. If the market holds its range and pulls back to test the previous high, around 1.95, this would be another great place to look for a short-term sell opportunity.

Euro Frank

Euro Frank should be approached with caution due to the upcoming ECB decision. However, if the market tests its upper bound before the decision, it could present a range trading opportunity. Traders can short the market before the interest rate decision and exit before the decision itself. If the market breaks down after the decision, potential targets would be 0.938 or 0.952.

Dollar Pairs

While the dollar has shown strength, it is currently peaking in the scorecards. Traders should focus on long plays on the Swiss franc pairs, with the dollar as the second choice. Any pullback in the dollar pairs should be viewed as an opportunity to look for intra-week breakouts towards 0.620. If the market continues to trend higher and tests the previous high, this would be the second place to look for a short-term sell opportunity.

CAD Frank

CAD Frank presents an interesting setup after the Bank of Canada’s interest rate decision. If the Canadian dollar weakens, traders can consider shorting CAD Frank. However, this setup is purely dependent on the interest rate decision and should be approached with caution. Any pullback in this market would be viewed as an opportunity to look for a bearish reversal.

Gold and Silver Analysis

Gold remains a favorable asset for traders, given its flight-to-safety quality. Any pullback in the market should be viewed as an opportunity to look for bullish breakouts towards 2030. If the market holds its range and pulls back to test the previous high, this would be another great opportunity for short-term buying.

Silver, on the other hand, may struggle to go higher due to its lack of flight-to-safety quality. Traders should be cautious and filter silver longs. Any pullback in this market should be viewed as an opportunity to look for bullish breakouts towards 2430. If the market continues to pull back and tests the 2230 level, this would be the second place to look for a short-term buy opportunity.

Frequently Asked Questions

1. What is the potential impact of a major breakdown in US stocks on the Forex market?

A major breakdown in US stocks can lead to risk-off moves in the Forex market. Traders should focus on risk-off setups, such as long plays on the Swiss franc and the US dollar, to take advantage of potential flight-to-safety moves.

2. Which Forex pairs are favored for next week?

The Swiss franc pairs, particularly against the Aussie and New Zealand dollars, are favored for next week. Traders should also consider the pound and the euro against the US dollar and the Swiss franc.

3. What is the outlook for crude oil?

Crude oil presents a dilemma for traders, as it could experience both a sell-off and a spike in prices. Traders should approach this market with caution and consider long positions if they decide to trade crude oil.

4. What are the potential trading opportunities in gold and silver?

Gold remains a favorable asset for traders, with potential bullish breakouts towards 2030. Silver may struggle to go higher due to its lack of flight-to-safety quality, but traders can still look for bullish breakouts towards 2430.

5. How should traders approach CAD Frank?

Traders should monitor the Bank of Canada’s interest rate decision and consider shorting CAD Frank if the Canadian dollar weakens. However, this setup is purely dependent on the interest rate decision and should be approached with caution.