Weekly Forex technical forecast April 22 - 26.

Despite the comparatively low trading volume and thin market conditions due to the short trading week and Easter holidays in many western countries, main trends continued weighing on financial instruments worldwide. The risk-on trading mode was dominating in global stock indices; some of them managed to rewrite all-time highs or recover to pre-crash levels. For example, NASDAQ benchmark added another 0.81% to its cost and closed the trading week at the highest rate ever - 7696.5 points, charting weekly highs at 7714.6 points. Other US stock indices got stuck before breaking the record-high. S&P 500 charted a Doji candlestick on the weekly chart, finishing the week almost unchanged, while Dow Jones Industrial Average climbed 0.56%, printing the second-highest rate in the history. The most substantial risk appetite was noticed in European equities. French CAC 40 surged 1.41%, breaking through the double-top level charted in July - September 2018, and approaching to the highest weekly close noticed in May 2018. German DAX 30 index soared even more - 1.85%.

The opposite tendency was dominating in safe-haven assets as investors continued getting rid of low-yield bonds, currencies and precious metals. US 10-year Treasury yields failed to continue two-week recovery, remaining flat; Swiss Franc was sold off against the greenback (USD/CHF +1.19%) and other major currencies; gold price dropped 1.16%. The US dollar index gained 0.55% with the most strength registered on Thursday mainly on profit-taking speculative flows. Euro and British Pound were trading on the weaker side, while the Japanese yen was not volatile as USD/JPY failed to breach the resistance of 112.00 but did not bounce too far from it. Commodity currencies were not in demand among speculators, Aussie lost 0.29%, Kiwi slid 1.14%, USD/CAD added 0.54% to the exchange rate. WTI Crude’s uptrend seemed to lose the upwards momentum as the black gold failed to breach the resistance of $64.00 for the second week in a row, appreciating only 0.33%.

NASDAQ: Bullish.

Global investors continued strengthening the US tech sector. The total price of 100 companies shares grows six weeks in a row with the only significant retracement noticed on March 8. The four-hourly chart below shows how the Ichimoku Cloud trend indicator works for the buy-dips intraday trading strategy. Four green arrows on the right side of the chart show moments when NASDAQ tested Ichimoku’s Base Line, which functioned as the support curve. The primary technical signal was bears’ inability to push the 4H close price below the Base Line, and the bulls used to step in immediately with heavy-volume buy order by the market price. Such intraday tactics should continue working effectively as long as the Ichimoku Cloud keeps the same configuration. The only concern is a comparatively low range of stop-loss orders, which have to be hidden below the bottom of the span. The left arrow shows that potential correction might happen with a test of the second support barrier as the benchmark charted on March 27. Therefore, traders should be ready for such retracements. Some large accounts might even consider adding more volume on those bounces.

Weekly Forex technical forecast April 22 - 26.


DXY: Bullish.

The US dollar index gained strength last week with the main achievement charted in one single day - Thursday (+0.43% out of 0.55% weekly). The 34-days simple moving average continued supporting the index after the breakout on March 26. The fast RSI oscillator points to strong bullish momentum far from overbought levels with enough room to go north. DXY eyes the highest daily close price charted on March 7 (97.60) with a high chance to re-test it in the very nearest future. The only concern for the bulls is that the MACD trend indicator might have a bearish divergence on the second test of the resistance. Therefore, traders should oversee daily close prices, taking into account both MACD lines and histogram. The trading strategy should focus on tight take-profit orders, positions should none be held for too long as the bearish reversal, and a bounce back towards the bottom range of the ascending channel is likely in case if the bulls failed to chart a sustainable breakthrough on the upper side. Aggressive traders might even consider shorting the US dollar index if the resistance held rates from further appreciation.

Weekly Forex technical forecast April 22 - 26.


NZD/USD: Bearish.

The New Zealand dollar is in trouble. The technical sentiment is negative on the daily chart below due to several reasons. First, the descending channel has a sequence of lower highs, and the upper trendline has three connection points of regular close prices. Second, the Bollinger Bands indicator has downside angle with a comparatively wide range between its lines; daily prices remain near the bottom of the spectrum. Third, the ADX mainline (black) is continuously growing, which shows the strength of bearish momentum, while -DI line (red) is well above +DI line (green). The only concern for the bears is that Williams %R oscillator is in the oversold territory, charting serial bullish divergence. Therefore, the big question is whether sellers will be able to break that divergence or will a bullish rebound lift NZD/USD towards the BB middle line. On the other side, the support trendline of the descending range is not far from current prices, so a test of the range 0.6600/33 is likely for nearest days. We would sell the pair on bullish retracements.

Weekly Forex technical forecast April 22 - 26.


GOLD: Bearish.

Gold price is in the downtrend since the head-and-shoulders reversal pattern started to work out on March 26 when the right shoulder was charted. The sequence of lower highs was confirmed on April 10, when the bullish retracement was limited by $1308.20. Gold dropped 5% since February top price around $1350 per ounce. The lower-lows pattern is also in play as the latest weekly close price was lower than the bottom charted on January 21. As a result, a test of the nearest support is likely. There is a cross of two trendlines - green descending median, which connects highs in April 2018 with lows in January 2019, and blue ascending support trendline, which connects lows in September, October and November 2018. The cross of those lines comes precisely at the highest daily close price noticed in July 2018 - $1257.70. Those traders, who still hold shorts for gold, should consider taking profits around those levels as a consolidation or even bullish retracement is possible if the bears failed to breach the support with a first attempt. Going long would be too early though.

Weekly Forex technical forecast April 22 - 26.


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