Here’s the market outlook for the week:
EURUSD
Dominant bias: Bullish
The market was bearish from Monday to Wednesday, and then began to make
some bullish effort, which eventually paid for. From the middle of last week,
price rose by 270 pips, to test the resistance line at 1.2200. That resistance
line remains under siege, for it would easily be breached to the upside this
week, as price gain at least, another 150 pips. The outlook on EUR pairs
remains bullish.
USDCHF
Dominant bias: Bearish
This pair made some weak bullish effort from January 8 to 10, almost
reaching the resistance level at 0.9850. However, further bullish attempt was
rejected as a bearish movement was assumed, which ended up generating a bearish
signal in the market. From the high of last week, price dropped by 170 pips,
closing below the resistance level at 0.9700 on Friday. The outlook on USDCHF
is bearish for this week, for the market would face attacks from two fronts:
CHF would gain some stamina, and a strong EURUSD would help ensure continuous
bearish pressure on USDCHF.
GBPUSD
Dominant bias: Bullish
The bullish breakout that was witnessed in this
market has ended the protracted consolidation in the market, which had held out
for several weeks (save the bullish attempt that occurred in the last week of
December 2017). GBPUSD moved upwards by 200 pips on Friday alone, and since GBP
pairs would be somewhat bullish this week, it is logical to expect the bullish
movement to continue, reaching the distribution territory at 1.3750 and 1.3800.
USDJPY
Dominant bias: Bearish
USDJPY went south by 214 last week, making several unsuccessful attempts
to break the demand level at 111.00 to the downside. There is a Bearish
Confirmation Pattern in the chart, which supports a bearish outlook on the
market. That means the demand level at 111.00 would be breached to the
downside, as price journeys further southwards to towards the demand levels at
110.50, 110.00, and 109.50.
EURJPY
Dominant bias: Neutral
Although the market was mostly bullish within the last 4 weeks, the
bullishness was challenged last week as price dropped 320 pips from Monday to
Wednesday. Nonetheless, the upwards bounce that was seen in the market on Thursday
and Friday was strong enough to challenge its short-term bearishness. Only a
movement of 100 pips to the upside would result in a strong “buy” signal;
whereas a movement to the south, even by 150 pips, would help put more emphasis
on the recent bearishness in the market. Until one of these directional
movement happens, the bias on the market would remain somehow neutral.
GBPJPY
Dominant bias: Bullish
This cross dropped 310 pips from Monday to Wednesday, consolidated on
Thursday, and bounced upwards on Friday. Generally, the bias on the market is
bullish: The pullback that happened in the first few days of last week appears
to be offering an opportunity to buy long at better prices. Thus, the supply
zones at 152.50, 153,00 and 153.50 would be targeted this week.
This forecast is concluded with the quote below:
“Trading is a simple
profession since it can be summed up in three ideas. If it is trending up over
the time frame you are trading you buy it. If it trending down over the time
frame you are trading you sell it. Don’t bet the farm. It is hardly rocket science
yet despite this our very nature more often than not defeats us despite the
evidence that it shouldn’t.” – Chris Tate
Market Analyst, Trading Signals Provider and Coach
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