Weekly Outlook: 2014, November 16 - 23

USD/JPY forecast for the week of November 17, 2014, Technical Analysis

The USD/JPY pair broke above the 115 level during the week, and now looks poised to go much higher. We believe that this market will eventually go to the 120 level, and that pullbacks should continue to be buying opportunities going forward. With that being the case, we really like this pair and we believe that the US dollar will continue to climb against the Japanese yen over the longer term and that this is a nice “buy-and-hold” type of market. We have no interest in selling this market on believe that the 110 level is now the absolute bottom.

Gold forecast for the week of November 17, 2014, Technical Analysis

The gold markets as you can see initially fell during the course of the week, but found enough support at the $1150 level to turn things back around and form a hammer. This is the second hammer in a row, so we anticipate that the gold markets could very easily bounce back into the previous consolidation area. That would have this market going possibly as high as the $1400 level, an area that had been resistive. Because of that, the market looks as if it’s one that will give us a couple of positive weeks, before the sellers step back into play. After all, the US Dollar Index looks as if it’s getting ready to pull back a little bit, so that of course means that the gold markets should continue to fall from here. Ultimately, we believe that this market will continue to be bearish going forward and as a result we are much more comfortable selling this market been buying and although we recognize there is a short-term opportunity of going countertrend.

If we break down below the bottom of the hammers, that would be extraordinarily bearish in this market should then head to the $1000 handle. We believe that the market ultimately will continue to be one that you can sell and sell again, so it’s difficult to get overly excited about buying. Because of this, the markets are going to be volatile but I think ultimately we will see the fundamentals of the US dollar come into play, and that we should continue to see bearish pressure above. We are looking for resistive candles in order to sell because it’s longer-term bearish and as a result it’s a market that if you are a trend trader, continues to offer opportunities. However, if we did break above the $1400 level, that would be a massive trend change signal. That being said, we feel that there are big profits to be had if you are nimble enough to trade both sides of this potential position in the gold market.