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Saturday, June 25, 2016

Weekly Trading Forecasts on Major Pairs (June 27 – July 1, 2016)

Here’s the market outlook for the week:
                                          
EURUSD
Dominant bias: Bearish
This pair tested the resistance line at 1.1400, and went above it briefly. Price could not stay above that resistance line: It tumbled by 500 pips before a 200-pip bullish correction occurred on Friday. The bias is bearish, and further bearish movement is possible, but it may not be more than 300 pips downwards. Price might also journey upwards this week, owing to the fact that the extreme bearish movement that occurred on Friday could bring opportunities to buy.  

USDCHF
Dominant bias: Bullish  
USDCHF was essentially a flat market in the context of a downtrend, before the strong bearish movement on EURUSD forced it to break out upwards. Price moved upwards 250 pips, reaching the resistance level at 0.9800, and the got corrected by 100 pips. For the bias to remain bullish, EURUSD needs to continue moving south; because the events affecting EURUSD are what would determine the movement of USDCHF (which is being currently affected by inertia on its own).

GBPUSD
Dominant bias: Bearish  
On Friday, June 24, 2016, Cable experienced its strongest bearish movement in recent years. Price dropped by 1700 pips, reaching the low of 1.3230. Price later performed a 500-pip bullish correction, later closing at 1.3682 that Friday. Normally, the outlook on GBP pairs is bearish, and continuous selling pressure on Cable is a possibility. However, the extreme market situation would also bring some opportunities to go long, for those who are very good at catching falling knives. The markets could open with gaps next week. While things are currently bearish on GBP pairs, recovery would gradually or smoothly return to the markets.
 
USDJPY
Dominant bias: Bearish
The Brexit votes outcome also had bearish effects on JPY pairs, and that was exactly what brought about a bearish momentum on USDJPY, which was consolidating in the context of a downtrend prior to that time. What happened to this market on Friday simply brought more emphasis on the long-term bearish trend, which is also visible on the daily and weekly charts.  Although the outlook on JPY pairs is bearish, the 700-pip decline that was witnessed on Friday would bring about a rally within the next several trading days, as bulls seem to have reached the end of their tether.          
                                                                                                                               
EURJPY
Dominant bias: Bearish
This currency trading instrument dropped 1200 pips on Friday, thus forfeiting the 350-pip bullish gains it saw within Monday and Thursday.  The bias on 4-hour chat, daily chart and weekly chart is bearish, but price has already encountered very formidable demand zones on Friday. While selling pressure is present in the market, we may witness some bullish attempt in the next few weeks.

This forecast is concluded with the quote below:

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." - Warren Buffet  


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