Brief Summary
This daily market outlook discusses potential trading opportunities in major dollar pairs and gold, considering factors such as US dollar strength, geopolitical events, and market structure. The analysis focuses on identifying key levels of liquidity, demand and supply zones, and fractal structures to determine optimal entry points.
- EuroUSD is currently consolidating, with potential for downside if the fractal low breaks.
- The dollar index shows bullish momentum on the 4-hour timeframe, suggesting potential dollar longs.
- GBPUSD presents a better shorting opportunity compared to EuroUSD, aligning with dollar strength and fractal structure.
- AUDUSD and NZDUSD have been selling off aggressively due to risk-off sentiment.
- Dollar yen and dollar Swiss are moving slowly due to their safe-haven status.
- Gold is expected to reverse and provide long opportunities.
Euro/USD Analysis
Euro/USD has been trending downwards due to US dollar strength, influenced by geopolitical tensions (Israel air strikes) and renewed tariff discussions by Trump. The pair has taken out a swing high, suggesting a potential pullback towards a weekly imbalance. Although a retrace to the downside could present a long opportunity, it's not ideal due to trading above a liquidity high and outside a demand zone. From a weekly perspective, further downside is preferable.
Daily Timeframe and Trading Strategy for Euro/USD
The daily swing structure for Euro/USD is bullish, trading at a premium above the 0.5 Fibonacci level. While the market may not need to retrace fully before moving up, going long in premium carries risk. The pair is currently trading within a daily imbalance, and a break below this level could lead to a deeper retracement. Ideally, traders should look for long positions from weekly demand zones, waiting for a retracement into discount, a market structure shift, and a bullish fractal structure. Shorts are not recommended without more confluence, as the daily and 4-hour swings and fractals are currently bullish.
Dollar Index Analysis
The dollar index is in bearish momentum on the daily timeframe but shows bullish momentum on the 4-hour timeframe. The internal market structure remains bullish, with the order flow heading towards the highs. Shorts are not advisable until the current fractal low is broken. The existing demand is holding, suggesting the current fractal high is likely to be broken. A short bias should be re-evaluated once the price reaches a higher level, such as a supply zone, waiting for the daily fractal structure to shift.
GBP/USD Analysis and Trading Opportunity
GBP/USD is similar to Euro/USD, having taken out a major swing high, which typically leads to a retracement. The daily timeframe shows a change of character with supply forming and the market selling off after tapping into the supply zone. GBP/USD presents an ideal shorting opportunity compared to Euro/USD, aligning with dollar longs. The target for these shorts is the sell before the big buy up. The entry has already occurred following a 1-hour change of character and a retrace into an imbalance. Further downside continuation is expected, aligning with the daily and 4-hour fractal structures and dollar bullishness.
AUD/USD Analysis
AUD/USD has been selling off aggressively, typical of risk-on pairs during geopolitical uncertainty. The daily timeframe is nearing a break of the fractal low, which could lead to further shorts. The 4-hour timeframe shows a wick into an imbalance area. On the 1-hour timeframe, liquidity was swept above the high before setting off downwards. The focus is on the downside, aiming to take out ascending lows, with the dollar index being monitored for targets.
NZD/USD Analysis
NZD/USD has been selling off aggressively. The market traded at a premium, suggesting a potential pullback trade. The 4-hour timeframe provided good price action with a breaker structure. After the breaker structure, a pullback is expected. The overall order flow is playing out well, with supply in control. The move has largely been made, shifting focus to where NZD/USD will bottom out. The daily demand zone is being monitored, with attention on how the 4-hour timeframe reacts once all lows are taken out, potentially looking for a change of character to consider longs.
Dollar Yen and Dollar Swiss Analysis
Dollar yen is pushing up slightly, remaining consolidative due to safe-haven assets fighting each other and trading based on interest rate differentials. The 4-hour timeframe seems to be holding, with a refined 4-hour supply zone pushing the market higher. The pair is currently bullish, and sells are not recommended. Dollar Swiss is moving slowly, also due to being safe-haven pairs trading against each other. The supply and imbalance are still pushing the market lower, and only shorts are being considered. The pair is very consolidative, and traders should wait for the demand zone to fill and then get in on the momentum once the low breaks.
Gold Analysis
Gold has been selling off slightly, but further upside is still expected. The bullish daily fractal structure is at the 0.5 Fibonacci level. The focus is on the market slowing down and providing a clear reversal pattern to look for longs again. This could occur on the 1-hour timeframe, where the fractal structure starts breaking again, potentially leading to longs to take out descending highs. Shorts are not of interest.
