Weekly Forecasts on Major Pairs (January 13 – 17, 2014)

 Next week, the markets are expected to keep on going contrary to the dominant biases. As expected, there have already been breakouts from the current equilibrium phases that are seen in some cases. As the breakouts are being expected, it would also be helpful to watch what volume is doing. Experienced traders know that volume is an important factor behind prices. But it is amazing that most traders do not pay attention to it.

EURUSD

Dominant bias: Bearish

This pair was trading largely sideways until there was a bullish breakout in the market. The breakout, though a serious threat to the extant bearish bias, has not really rendered it useless. The price has closed above the support line of 1.3650, but it would need to close above the resistance line of 1.3700 before it can be said that the bearish bias is over and the trend has turned bullish. Otherwise, the current price action would simply be an opportunity to sell another rally.

USDCHF

Dominant bias: Bullish

This pair was trading largely sideways until there was a bearish breakout in the market. The breakout, though a serious threat to the extant bullish bias, has not really rendered it useless. The price has closed below the resistance level of 0.9050, but it would need to close below the support level of 0.9000 before it can be said that the bullish bias is over and the trend has turned bearish. Otherwise, the current price action would simply be an opportunity to buy another dip in the price.

GBPUSD

Dominant bias: Bullish

Oddly enough, this pair, which is supposed to be in a positive correlation agreement with its EURUSD counterpart, is in a negative correlation with it. This kind of phenomenon sometimes happens before the law of positive correlation comes into effect again. Right now, the trend in the market is bullish and it may be possible for the price to reach the accumulation territory at 1.6600, unless it would go into a negative correlation with the EURUSD.

USDJPY

Dominant bias: Bullish

For a few weeks, this currency trading instrument has been having difficulties in trading significantly higher. The trend is bullish, but it seems that the near supply zones are becoming too formidable for the bulls. The greatest barrier is at the supply level of 105.50, and should the bulls find it impossible to breach that level to the upside next week, this would be beginning of a long-term southward journey in the market. With that, we would prefer to sell rallies.

EURJPY

Dominant bias: Bearish

This cross has already been bearish and the bulls are unable to even push the price beyond the supply zone at 143.00 (though that zone has been tested several times recently). There is a Bearish Confirmation Pattern in the market and the price could fall further seriously from here – certain JPY pairs have done that.

This forecast is concluded with the quote below:

“Trading is serious business and you must be prepared with the best that you have in order to do battle in the trading trenches.” – Dr. Woody Johnson

Source: www.tallinex.com

Eye-opening trading lessons: http://www.harriman-house.com/experttraders