Welcome back to this weeks FX Analysis!
Before I start this week’s analysis, I just want to take a moment to reflect on my Forex experience….
For those of you that were fortunate enough to find my blog prior to taking down my live trades, you may recall that I started demo trading Forex in May, 2011 and that I started live trading Forex on May 23rd, 2011.
So it’s been about 2 years since I started watching Forex markets. Two years may sound like a long time but when you look at the following chart, the time that I’ve watched Forex only represents a small portion of the price movement over the past 17 years.
The black box represents how long I’ve been watching Forex markets for these pairs. In addition, you may recall that I started my electronics business back in 2007 (red box), I bought inventory in USD while sold in CAD. So I started watching the USD/CAD in 2007 but I didn’t monitor it closely until I started Forex trading.
The chart above makes you think ‘how much do I really know?’ I’m only 23, turning 24 in a few months. I don’t remember when USD/CAD was up at 1.6 but my parents do. People in Europe may remember a time when EUR/USD was below parity or when GBP/USD was up at 2.1. Anyways, let’s get started with this week’s FX Analysis!
Disclaimer: Although I do not have any open positions at this time, I may take trading positions throughout the week without notice. So take this into consideration when reading my FX Analysis as I may be biased in what I write.
Commentary / Technical Forecasts
USD/CAD: Long term – up (61.8% fib held) | Short term – unclear
- Price is currently at resistance (weekly trend line) but compared to previous encounters where price bounced immediately, price is hugging the trend line. So it looks like it can break it this time and continue moving up.
- Daily chart shows the “hugging” part of the weekly trend line.
- H4 directionality is unclear in the short term, price could retrace back down or simply continue moving up.
AUD/USD: Long term – down | Short term – up?
- Monthly chart shows that price does not have to retrace after breaking the monthly trend line. A circle is drawn to show the potential drop that can happen over the next couple months.
- Weekly chart shows some support levels / demand zones that are coming up soon.
- H4 chart shows a sharp/steep wedge, which usually indicates opposite movement is coming soon because price can’t move sharply in a short time. This is however conflicting with the long term forecast, hence the question mark.
EUR/USD: Long term – down (50% fib held) | Short term – up?
- Monthly and weekly charts show nothing of interest.
- Daily chart however, shows a potential upward trend line where price has already bounced off of (yesterday).
- Similar to AUD/USD, the H4 chart shows a sharp/steep wedge, which indicates opposite movement is coming soon. This is however conflicting with the long term forecast, hence the question mark.
GBP/USD: Long term – down (50% fib held) | Short term – up?
- Monthly chart shows a lower trend line for a possible bounce up but if this monthly candle continues down and closes as an engulfing candle, it would void any possibility of a bounce.
- H4 has 3 new things drawn: fib level from the 1.48 low to the recent 1.56 level, a trend line connecting the past low’s & a trend line connecting the recent high’s. All 3 coincidentally meet at the 61.8 fib level for a possible bounce up. This is however conflicting with the long term forecast, hence the question mark.
Until next week, Good Luck Trading!