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Sunday, August 28, 2016

Daily analysis of major pairs for August 29, 2016

The USD/JPY consolidated from Monday to Friday, and then broke upwards on Friday. Since price has been consolidating for about two weeks, the breakout on Friday is yet to bring about any dominant bias in the short-term. The bias would turn bullish only after price goes above the supply levels at 103.00 and 103.50.

EUR/USD: This currency trading instrument found it difficult to go above the resistance line at 1.1350. Price fell sharply on Friday, causing a formidable threat to the ongoing bullish bias. A movement below the support line at 1.1100 would result in a Bearish Confirmation Pattern in the market. A movement above the resistance line at 1.1350 would strengthen the bullish outlook.




USD/CHF: This pair went upwards 170 pips last week. There are three factors that contributed to this: The USD was strong in its own right on Friday, the CHF was weak against some majors, including the USD, and the EUR/USD plummeted on Friday. As long as these factors are in effect, the USD/CHF would continue going upwards. Otherwise, price would decline.

GBP/USD: The Cable went upwards by 200 pips to test the distribution territory at 1.3250; prior to the bearish retracement that was seen on Friday. The bias on the Cable is bullish in the short-term and bearish in the long-term, and price ought to continue going northward so that the short-term bullish can be sustained. GBP pairs would experience high volatility in September.

USD/JPY: The USD/JPY consolidated from Monday to Friday, and then broke upwards on Friday. Since price has been consolidating for about two weeks, the breakout on Friday is yet to bring about any dominant bias in the short-term. The bias would turn bullish only after price goes above the supply levels at 103.00 and 103.50.

EUR/JPY:  This cross has been flat for three weeks; plus the breakout that occurred on August 26, 2016, was not significant enough to bring about any news bias in the short-term. The dominant bias on higher timeframes like daily and weekly charts is bearish, and for the month of September 2016, it is expected that price would be trending lower and lower. The outlook on JPY pairs remains bearish. Therefore, any rally that was seen ought to be taken as an opportunity to sell short.

Performed by Azeez Mustapha,
Analytical expert
InstaForex Companies Group


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