Here’s the market outlook for the week:
EURUSD
Dominant bias: Neutral
Price made a bullish attempt on Monday, but started coming down
afterwards. The support line at 1.1600 was tested and price bounced off it,
closing above another support line at 1.1700. The market is neutral, and that
status will continue as long as price oscillates between the support line at 1.1550
and the resistance line at 1.1800. However, the neutrality in the market will
soon end, and ensuing movement could most probably favor bulls. This means a
break above the resistance line at 1.1800 is possible before the end of the
week.
USDCHF
Dominant bias: Neutral
This pair also went downwards at the beginning of last week, and then
rallied around the middle of the week, only to come downward again at the end
of the week. Price closed below the resistance level at 0.9950, threatening to
go further downwards. The bias on the market is eventually neutral, and it
would remain so until the support level at 0.9850 is breached to the downside.
The most probable direction is southwards.
GBPUSD
Dominant bias: Bearish
GBPUSD is a weak trading instrument. Since April 14,
price has been going downwards. Price moved briefly below the accumulation
territory at 1.3000, and then rallied by 170 pips, almost reaching the distribution
territory at 1.3150. The bias remains essentially bearish (but perpetual
bullish effort could threaten the bearish bias). There are additional distribution
territories 1.3200, 1.3250 and 1.3300.
USDJPY
Dominant bias: Bullish
After testing the supply level at 113.00 several times, a bearish correction
was started, which made the price close below the supply level at 111.50 on
July 20 (a drop of 150 pips). The bias is bullish in the long-term, but going
bearish in the short-term. Things will go completely bearish when price moves
further downwards by another 200 pips, reaching the demand levels at 111.00,
110.50 and 110.00, and going further downwards.
EURJPY
Dominant bias: Bullish
The market had been going upwards since June 28 until recently. The
recent bias is bullish but there is a high possibility of price going bearish. Price
has made a bearish U-turn, after almost reaching the supply zone at 132.00. It
is expected that price will continue to go downwards this week, thereby
rendering the recent bullish bias invalid and reaching the demand zones at
130.00, 129.50 and 129.00. Those demand zones may even be exceeded before the
end of July.
GBPJPY
Dominant bias: Bearish
There is a Bearish Confirmation Pattern in the market, as a result of a
drop of 300 pips last week. The drop has already generated a bearish signal in
the market, brought about by the perceived weakness in GBP, and the strength in
JPY. This week (even till the end of July), the outlook on JPY pairs is
bearish, and that means GBPJPY also will experience further bearish movement,
which would enable it to reach the demand zones at 145.50, 140.00 and 135.50.
This forecast is concluded with
the quote below:
“A surprising insight
for me in Jack Schwager’s Market Wizards was that most of the top traders he
interviewed are 1-trick ponies: they do one thing — and they do it very well.
Their success was built upon their ability to discover what others overlooked.
I concluded that ‘doing one thing well’ would immediately simplify my trading
life and could eventually evolve one thing into an important trading edge.”
– VTI
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