Hello Traders!
Welcome back to another week of FX Analysis!
Monthly Chart
Weekly Chart
Daily Chart
H4 Chart
Commentary / Technical Forecasts
As you all should’ve realized by now, I rarely include news/fundamentals in my analysis. I didn’t talk about the Cyprus bank levy in last week’s analysis but I’m mentioning it now because that levy caused an overreaction in the markets over the weekend.
This was shown via the huge gap on Sunday night followed by a partial retrace during the rest of the week, which doesn’t always happen (read more here: http://www.financialtradingjournal.com/forex-price-gaps-fake/). Furthermore, gaps in general usually mess up indicators and overall price action since it just “ignores” S/R levels and trend lines and goes right through them.
All of the pairs are still at “critical” points, so I don’t have any short term forecasts for this week.
USD/CAD: Long term – not sure | Short term – not sure
- Monthly candle still shows a rejection of the weekly trend line, how this candle closes by the end of the month will determine the long term outlook.
- Bears would’ve liked a red weekly candle this week to confirm the downtrend given the doji/red candle in the last 2 weeks. However, bulls were saved by the gap up. I wouldn’t be surprised if we do go down in the short term though to play out the weekly upward channel.
- However, price still has to contend with the upward H4 trend line; it actually bounced off of it twice this week. So we’ll wait and see what happens next week, as there is now a symmetrical triangle on the H4/daily chart.
AUD/USD: Long term – not sure | Short term – not sure
- Monthly candle still shows a rejection of the monthly trend line, how this candle closes by the end of the month will determine the long term outlook.
- Unlike USD/CAD, AUD/USD actually got a continuation weekly candle to possibly support a short term/long term uptrend.
- This move looks like it’s supported on a lower timeframe as well since the 61.8 fib level was broken this week. However, price still has to contend with the weekly trend line first.
- Furthermore, the upside move is limited due to the resistance in the 1.06 region. As you can see on the weekly chart, price has been bouncing between 1.062 and 1.016 since August 2012.
EUR/USD: Long term – down | Short term – not sure
- Monthly candle is still forming a pinbar, how this candle closes by the end of the month will determine if long term outlook changes or not. As long as price is below the previous weekly upward trend line, then the long term outlook is still down.
- The gap down really messed up the dynamics of price action since it made a lower low + broke the reversal confirmation like it did on USD/CAD.
- Daily/H4 chart still shows price being contained within the bearish flag formation; also, price is currently at the H4 downward trend line.
- EUR/USD has 2 paths this week unlike the other pairs, it can either be determined by the H4 trend line or the bearish flag. So there are 2 “forks” in the road, whereas the other 3 pairs only have 1 “fork” in the road.
GBP/USD: Long term – down | Short term – not sure
- Monthly candle is still forming a pinbar, how this candle closes by the end of the month will determine if long term outlook changes or not.
- Similar to AUD/USD, this got a continuation weekly candle to possibly support a short term uptrend and long term trend change. However, as long as price as below the weekly downward trend line, then the long term outlook is still down.
- Although the weekly trend line is coming up, price still has to break the weekly resistance level first before it can get to the trend line.
- Next week will be an interesting week to watch because price can either go back up to the 1.63 level or continue down to the low 1.4 level.
Until next week, Good Luck Trading!
Brian
