Weekly Forex Forecast (30/10/23) EurUsd / XauUsd + Forex Trading Plan! [HD]

Weekly Forex Forecast: Key Events and Market Analysis

Hey Traders, welcome back to the weekly Forex forecast! Next week is shaping up to be a big one, with three interest rate decisions and non-farm payrolls on Friday. However, the most significant event to watch out for is the FOMC meeting on Wednesday. In this article, we will discuss how to approach trading the dollar pairs in light of these upcoming events.

Market Analysis: Focus on Risk-Off Setups

Looking at the market scores for the coming week, it is clear that the US dollar and the Swiss franc are the two currencies in play. Both are above 50% to the upside, indicating significant potential for gains. Given the current market conditions, it is prudent to focus on risk-off setups. The Russell has retraced almost all the way back down to the yearly lows, and other markets like the NASDAQ Composite are on the verge of significant breakdowns. This suggests the possibility of risk-off moves not only in the stock market but also in Forex.

It is important to note that while the US recently reported a strong 4.9% GDP, this data is backward-looking and does not necessarily reflect future economic conditions. We need to consider future GDP prints for Q4 and Q1 next year, which may indicate a potential recessionary period. This is why focusing on risk-off setups in Forex, particularly the Swiss franc and the US dollar, is a wise strategy.

Preferred Currency Pairs: Shorting Commodity Currencies

In terms of currency pairs, I prefer shorting the New Zealand dollar and the Australian dollar against the Swiss franc and the US dollar. While the Australian dollar has slightly strengthened, the momentum is still to the downside. Additionally, the Canadian dollar is neutral but showing signs of weakness. Therefore, the commodity currencies, particularly the New Zealand dollar, are my top choices for short positions next week.

Technical Analysis: Opportunities in Swiss Franc Pairs

Let’s take a closer look at the Swiss franc pairs. Among them, the New Zealand franc and the Canadian franc stand out as the best shorting opportunities. Last week, both pairs tested their upper bounds, indicating a potential reversal or breakdown. This week, we can expect a pullback and a possible breakout to the downside. If the pullback continues, it may present an opportunity to short the New Zealand franc. Alternatively, if the market breaks out intra-week, a short position can be considered. The same applies to the Canadian franc, with a potential shorting opportunity on a pullback or an intra-week breakout.

Other Currency Pairs: Pound and Euro Shorts

While the focus is on the Swiss franc and the US dollar, we should also consider pound and euro shorts against the dollar and the Swiss franc. However, it is important to note that the commodity currencies are likely to outperform the pound and the euro next week. Pound franc and euro franc shorts are viable options, but they may underperform compared to the New Zealand and Canadian dollar shorts.

Gold and Silver: Reactive Trading

Gold and silver have been performing well, especially as safe-haven assets amid geopolitical tensions. However, with the potential for a stronger dollar, the upward momentum may slow down. In terms of trading opportunities, if gold pulls back to the lower bound, it could present a buying opportunity. On the other hand, if both gold and silver test their upper bounds, it may be a chance to short silver. It is important to be reactive and consider the overall market conditions when trading these precious metals.

Frequently Asked Questions

1. What are the key events to watch out for next week in the Forex market?

Next week, traders should pay close attention to three interest rate decisions and non-farm payrolls on Friday. However, the most significant event is the FOMC meeting on Wednesday. This meeting will provide insights into the future monetary policy of the US, which can have a significant impact on the Forex market.

2. Why is it important to focus on risk-off setups in Forex?

The current market conditions, with potential breakdowns in stock markets and signs of a global economic slowdown, suggest a shift towards risk-off moves. Focusing on risk-off setups in Forex, particularly with the Swiss franc and the US dollar, can help traders navigate these uncertain times and potentially profit from market volatility.

3. Which currency pairs are preferred for short positions next week?

The New Zealand dollar and the Australian dollar are the preferred currency pairs for short positions next week. Both currencies have shown signs of weakness, making them attractive options for traders looking to capitalize on potential downside moves.

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

Gold and silver have been performing well as safe-haven assets. However, with the potential for a stronger dollar, the upward momentum may slow down. Traders should consider reactive trading strategies, such as buying gold from the lower bound or shorting silver if it tests the upper bound.

5. How should traders approach trading the dollar pairs?

Given the potential for a stronger dollar, traders should consider shorting the New Zealand dollar and the Australian dollar against the Swiss franc and the US dollar. Pound and euro shorts against the dollar and the Swiss franc are also viable options, although they may underperform compared to the commodity currencies.

In conclusion, next week’s Forex market is poised for significant events and potential market movements. By focusing on risk-off setups, shorting commodity currencies, and being reactive in trading gold and silver, traders can navigate the market with a strategic approach. Remember to stay updated on key events and adapt your trading strategy accordingly.