EURUSD
Primary trend: Bullish
The EURUSD was able to break out of its recalcitrant equilibrium zone and traded upwards. The indicators on the chart are now pointing to upwards an upward determination. Having moved by over 100 pips after coming out of its equilibrium zone, the price might reach the resistance lines at 1.3700 and 1.3750 slowly or steadily. Should there be some bearish retracements, it would be temporary in nature, possibly taking the price back to the support level at 1.3550.
USDCHF
Primary trend: Bearish
Contrary to the strange scenario that occurred last week (in which the USDCHF was positively correlated with the EURUSD), this market has now been trending downwards. In trending modes, the markets have little regards for resistance and support levels. This market is expected to continue to yield to gravity, as most indicators now affirm to selling pressure on the markets. The price could reach the support levels at 0.9000 and 0.8950.
GBPUSD
Primary trend: Bullish
In yet another unusual scenario, the Cable was trading in negative correlation mode to the EURUSD. This was expected not to last long, because whatever happened to the EURUSD would eventually determine the direction of the Cable. Now this bearish plunge has been rejected totally, as indicators have begun to support northward probability. This is the beginning of a new trend, and the market should trend upwards. But please note that a serious bearish correction is possible in the near term.
USDJPY
Primary trend: Bullish
In the month of January 2013, the USDJPY pair trended upwards by more than 430 pips. This bullish outlook continues to hold here (trend-following indicators on the charts continue to testify to the bulls’ strength in the markets). Slowly and steadily, the market would continue to trend upwards. However, it should be noted that this would not come without some bearish pullbacks that would be near reversal-like. It might take the price back to 90.00, but eventually, the price may reach the supply level of 92.00.
EURJPY
Primary trend: Bullish
This is a bullish market, and the outlook for the next 5 trading days ought to continue to be so. This cross has moved upward by close to 1000 pips in the month of January 2013. This was characterized by upswings, followed by noteworthy southward corrections. Astute traders know how to handle this kind of scenario. Despite a possibility of the price reaching the demand zone at 123.50 during some probable corrections, the price should go upwards to the next target at 125.00 and another supply zone at 125.50.
Conclusion: Engulfing pattern candlesticks aren’t a curiosity in trending markets, especially as bullish and bearish pressures intensify. If you see this on 4-hour charts or 5-minutes chart, you’d get an insight into the nature of price actions during strong biases. Even when reversal pattern candlesticks like doji do appear, they do so in the context of the overall market outlook.
This article is concluded with the quote below:
“You will not make money trading unless you follow a predetermined plan and continually stick to that plan. That’s why you should pat yourself on the back every day if you can honestly say that you totally followed your rules throughout the day.” – Van Tharp
Source: www.paxforex.com
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