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Here’s the market outlook for the week:
EURUSD
Dominant bias: Bearish
This pair trended downwards in the first few days of last week, challenging the support line at 1.0950. From that support line, price went upwards by 250 pips, reaching the resistance line at 1.1200. The upward movement has been a threat to the existing bearish outlook and a movement above the resistance line at 1.1250 would result in a Bullish Confirmation Pattern in the market. This week, further weakness in USD may enable this pair to trend further upwards.
USDCHF
Dominant bias: Bullish
Though the bias on USD/CHF is bullish, bulls were unable to take price above the resistance level at 0.9500. That resistance level was tested several times but it could not be broken to the upside, which made the market experience some bearish correction. Price closed below the resistance level at 0.9400 and further bearish correction could invalidate the extant bullish bias. Things would now be difficult for bulls because it is expected that USD would be weak this week, plus CHF may gain a lot of stamina by the end of this month.
GBPUSD
Dominant bias: Bearish
There is now trending movement on Cable, which dived by 250 pips last week. Price tested the accumulation territory at 1.5350, and then rallied by over 160 pips, closing above the accumulation territory at 1.5500. It is clear that a measure of volatility is now in this market, for it was in an equilibrium phase a few weeks ago. Certain other majors were also in equilibrium phases in some past weeks/months. This week, Cable might continue to make northward attempts, in case bears fail to push price below the accumulation territory at 1.5450.
USDJPY
Dominant bias: Neutral
This trading instrument, which once vacillated between the demand level at 122.00 and the supply level at 124.50, trended strongly last week. Price went seriously south, testing the demand level at 120.50, and after that, price rose by over 230 pips, closing above the demand level at 122.50. The bias could have gone bearish, but the subsequent rise in price has neutralized that. Further northward journey may be deceptive here, for there is still a high possibility that this trading instrument would become weak again this week or before the end of this month. JPY may become very strong by the end of the month and this would send most JPY pairs tumbling.
EURJPY
Dominant bias: Bearish
Last week, EUR/JPY was unable to go below the demand zone at 133.50, in spite of commendable effort of bears. Price went out of balance around that demand zone and it rallied significantly by 350 pips, closing around the supply zone at 137.00. This strong rally has put the recent bearish bias in jeopardy – a further northward movement of 100 – 150 pips would simply result in a confirmed bullish bias. As a result of the ongoing events in the Eurozone, this cross and other JPY pairs might open with gaps this week (and of course with other EUR pairs).
Source: Tallinex.com
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