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As I said last week, Thanksgiving week is a hard one to trade and it tends to go in one direction to trap retailers by the end of the week. Which seemed to be the case this week also. I was watching the PA closely and to me, this looks like a typical bull trap. Strong bottoming on the USD chart, very strong rejection on GU below 3400 and a friday fakey on EU, with a strong close at 1960. And seing how everyone has bullish predictions on EU, big players did the job well, to fool retailers. Now when everyone is convinced about an upcoming EU bull, we can start looking for short opportunities. Fundamentally, brexit is bad for both, EU and GU, deal or no deal, doesn’t matter. It will create a big uncertainty for months to come, possibly all year next year. My first big target on GU is 2900, with some bumps on the way, depending on the volatility is in december, but either way, 2900 seems like a safe target for me. When it comes to EU, I expect 1770 to be hit, with a possible bump between 1850-1870. For targets beyond that, we need to wait where the monthly candle closes in both november, on monday, and december. Its too early to predict anything beyond those levels now.

As I have been saying previously, to me, US dollar is bottoming, and most xxxUSD pairs are topping. Last week analysis for NZDUSD is still valid, went up a bit, but still didn’t even touch 7000 or came close to it. I thought it might spike up before a drop, but doesn’t even have power for that, it seems. So selling is still fine at the current levels, no matter how bullish the chart may appear to you. Same goes for EU and GU, where I am actually surprised people are still buying and from what I am reading on the forums, people take 1.20 or higher on EU as something that has to come. Well, all I can say is, good luck with such trades. Not only are EU longs accumulating negative swaps each day, to me the chart looks like it can break down at any moment. And with retail so convinced about longs, they will be adding longs on the way down…first at 1800, then 1750, 1700 and finally at 1600, where I expect most of the retail world to be long and strongly bullish, expecting another leg up…which may never come. If you look at the monthly chart, the targets aren’t up, they are down…and they are much much lower than where we are now. So why chasing longs for 50-100 or even a little more when the downside is so much more scarier? Being trapped in longs, when this thing breaks down, your account would be eaten up just by the negative swaps hitting you daily…even if we keep ranging just couple hundred pips lower. Not saying EU will break down and crash, but why take the risk, if it could? Fundamentally it will not only make sense, but it would even help the economy to recover faster. I am expecting a currency war next year, as 2021 will be about recoveries and nobody wants a strong currency for that, the weaker, the better.

Same story goes for GU, a lot of convinced bulls on the market, buying pound into the biggest uncertainty of the last few decades, the brexit. In january, UK is out of the EU, at this moment it doesn’t even matter if a deal is agreed upon, which it most likely will, because it would be a last mine half-baked deal, not making things any better for the UK, or EU for that matter. So what are the options? A deal will be announced…GU will spike up, can be even a few hundred pips, and that will be it…soon after market will realize it makes no sense to hold pound into 2021 and it will be sold out. And the second option…no deal…and a pound crash that will burn many accounts. So whats the point to look for longs at 3300? To hope for 3400? Or even 3500? And risk a crash towards 1.20 or lower? I will skip longs on GU at these levels, definitely above 3000.

Finally, lets take a look at UCHF, which is just EU reversed. I made the prediction below, early this year…when everyone was buying UCHF between 9700-9800, I had a feeling it will go down first, take out all the bulls and eventually turn up and strongly reverse upwards, for a longer term move. Half of it is done now…so the question is, will it work out in full? If it does, EU bulls will be in big trouble.

And one last thing…next week is Thanksgiving week in the US…in my experience, its not easy to trade, so if you are not experienced enough, better stay out. It might go in one direction all week, leaving many people trapped, whichever direction it decides upon.

Last week I talked about a possible dollar correction or reversal, which worked out fine and UCHF has hit both of our targets as per this article.

All trades from last week are still valid, so there is no point to do the same analysis again. I will focus on NZDUSD this week. It is very close to a strong demand zone for shorts, so its worth to look at. Last week, most NZ news were positive, central bank didn’t lower rates, despite big pressures to do it and YET the New Zeland dollar didn’t make as big of an upmove, which makes me think that bulls are now too exhausted. NZ is hovering below the 6900-7000 level and there couldn’t be a better place to short this pair. Mainly because its easy to place a SL, above 7000. But let the USDCAD trade from last week be a lesson for you, the tight SL I had planned for it, was hit early in the week and then price reversed immediately into the predicted direction. So when it comes to NZDUSD, even though 7000 is a strong resistance area, I wouldn’t be surprised, if it made a quick fake spike above, to hit all the SLs there and then be sold off heavily. So the 7050-7100 area is probably a better spot for a safe SL. When it comes to targets, first would be 6750-6775 and second 6500-6600.

I rarely trade the canadian dollar, as it can be crazy volatile and go too much in one direction sometimes, but the current chart setup offers a good opportunity with very little risk. As you can see on the chart below, 2950 is a strong support, holding now for over 2 years. Current price is now around 3060, so even a SL below 3000 might be used, if early in the week, the volatility is not too big. Target would be 3500, up to 3600 maybe, so the risk to return ratio is fantastic on this one, very little to lose for a lot to gain. And with Joe in office, oil will be most likely dumped, which only helps to decrease the CAD value.

My last week’s bull target was hit to the pip and I am slowly turning bearish on the pound. If you read my previous pound comments, I was basically bullish since the break of 1.28 and later even 1.27. My target was always 1.3170, which was hit twice now, for a nice double top. I can still see more of an upmove, but it should be limited and every spike above 3200 is a good selling opportunity. Even above 3300, no problem. Soon, we may have a trade deal with the EU, so GU would probably spike up on that, but that should be it, when it comes to the bullishness. Like I mentioned in one of my previous analyses, I expect retail to start buying pound heavily, when a trade deal is agreed upon, and that will be probably the best time to sell against the herd. But nothing wrong with selling now, even 3150 is a very good selling point for 200 pips or more. My medium term target is 2750, though, so for that, a SL above 3350 might be a good choice.

We had the US election this week and no matter how Trump may try in the courts, it looks like the election is lost for him. Of course, the election wasn’t clean, no election is and since the US has a 3rd world election system, with manual vote counting like in the medieval times, its easy to manipulate the election in any direction. This time, Democrats did the better job, so they won. Well, maybe one election in history was clean, the one in 2016, because from the leaked documents, it was obvious Clinton wanted Trump to be her opponent, even leftist media was pushing for him, since they expected an easy win for the Democrats that way. So the Republicans probably thought there is no point to manipulate the election and spend tons of money on it, since its lost anyway, as nobody took Trump seriously…and Democrats probably thought the same, why spend resources, if there is no chance in hell they could lose that election. So they just left it to the people, maybe for the first time in history, and it turned out to be the funniest election night ever. They surely learned their lesson and were prepared this time. Not that it matters to us, who is in the White House, since politicians don’t care about the people, anyway, so lets try to make the best out of it and make some money, at least.

When it was more and more clear to the market that Biden will win, dollar was dropping heavily…and now everyone seems to think that if Biden gets elected officially, dollar will drop, which I don’t see happening. Lets look at the history of the past presidents and the correlation with USDx and EURUSD. I think the charts below say more than any amount of words would, so enjoy.

I will start with USDCHF this week, because this friday I saw something I have seen before, one year ago, to be exact, also on a friday. Back then UCHF made a surprising spike above parity, it hit something around 1.0020 and looked super bullish. I remember it, because one “guru” on forexfactory, with some of the most followers, admired by many(not me), predicted a super strong UCHF in the following months, targetting 400-500 more pips up. But it was more than clear that it was a topping pattern, more than anything else. The same friday, the pair went back towards 1.0000 and closed there, still seemed strong. On the coming monday, it dropped over 100 pips and the drop didn’t stop…now its over 1000 pips, since it was dropping all year. Just tells you how you should always do your own analysis and never blindly follow anyone, nor me for that matter. But back to UCHF…this friday, I saw a very similar price action to the one from one year ago…now we dropped below 9000, pair seemed dead as there was no power to bring it up 5 pips…eventually corrected itself and broke back above 9000. A very similar thing…9000 is a very strong and important number…just like parity was…and a strong franc is killing the swiss economy at the moment, which worries even the SNB, since they are trying to interfere in the markets for months now. Eventually they may succeed. I definitely don’t want to be the one trading against a central bank. Now, I am not saying UCHF will go up 1000 pips…BUT it definitely should go up some…and most probably higher than it was in the past few weeks or months. My first big target is at 9200 and if broken to the upside, I think we have a new trend, uptrend that is.

Next week we have the US election on tuesday and FED on thursday, so the volatility should be good for both bulls and bears, with moves in both directions, most probably. When looking at the EU chart, it looks very bearish, as we predicted last week, BUT when I look at the hourly setup, I see a lot of hidden bullishness. Thats why I do not plan to short this move any further, for now. I see 2 options…either this move really is bearish and we could short the correction towards 1750-1770 or this move will start a bull into 1830+, possibly 1920. Either way, bulls should be safe early in the week. And a SL area is clearly visible on the chart, too. Interresting things are happening with GU now during the weekend, with the weekend price being 80 pips lower than the friday’s closing price. BUT it is yet to see if the market opens with a gap this big or if the price goes back to the closing levels before market opens. This weekend pricing is not very reliable, especially on saturdays, so it will be interresting to follow what happens. If no gap, GU should go above 3100, as the 2900 area is creating strong support zones and unless 2850 is broken safely, 3100 and higher seems unevitable. I expect some positive brexit news, too, so I prefer to buy the dips, until the deal if final. Then we might see the “buy the rumor, sell the fact” scenario. Right now, everyone seems to be shorting GU..once a brexit deal is final, retail will most definitely start buying the pound and thats when I would like to start selling. But first, lets see if the gap really develops and if it does, if the market can close it on monday.

I will start my analysis with GU, since I am not going to trade it this week, unless I see a clear direction. My target from 4 weeks ago(analysis from september 26) was hit to the pip this week, as seen on the chart below.

But friday’s PA was very misleading, I don’t like it a bit. EU was going strongly up all day, GU down all day…so one of those pairs was “wrong” and I hate to trade GU unless I see something clear on the chart…and now I see both options as possible, 3300 and also 2700. And since we are in the middle, there is nothing to trade for me, at least nothing medium term or long term, scalping might be fine, we will see during the week. EG looks better when it comes to risk to reward ratio…long term we should be heading towards 8500 or less. And every positive brexit news will spike GU up and take EG down…and like I said many weeks ago, the deal is almost a 100% certainty and now its clear to everyone, it seems. So not expecting many negative news, when it comes to brexit, anymore. But I still wouldn’t long GU at these numbers, so just waiting for something more clear on the chart.

This week will be mainly about EU and its “evil twin” UCHF, as we have the ECB conference coming up on thursday. I think all week will be about waiting for the perfect short. It might start dropping right away, from the current 1860-80 area or it might go up before ECB, above 1900 and drop from 1950-2000, we have to wait and see. Traders with good money management should be fine either way. On the H1 chart, we have a clear decision zone between 1800 and 1820, if bulls can protect this one, they will probably take it higher from there, before ECB. If bears take it below 1800 and manage to stay there safely, we should be heading lower. My medium term target is 1637 and a minimum target is 1710. So the only question is if we go higher first or if the week starts bearish right away.

And don’t forget, next week is the last week of the month, so it might be tricky and misleading, with all the news coming up at the same time.

Looking at the weekly chart, EU looks very bearish…BUT I see some risks with shorting it, just yet. Majority of retail is short, 60% of them, plus the H1 and H4 chart show a big bottoming…so a spike up is more likely at this point. The last week of october, during ECB, EU is more likely to drop. The good thing is, bulls have clear accumulation zones on the chart, which are good for a safe SL. And we are close to those areas, so the risk to reward ratio looks good, if we target 1790 on EU and 3020 on GU. Beyond that, we will see…I wouldn’t be surprised if we broke above 1830 on EU and 3070 on GU this week and didn’t give bears a chance until next week. But its better to take it step by step and look for short opportunities if we, indeed, go as high or higher. My first target for EU this week is 1750 and then we will see, if there is power to go towards 1790, might be hard, might be very easy, as price action is changing from one week to another very often and strong bear can easily become strong bull and the opposite.