Here’s the market outlook for this week: EURUSD Dominant bias: Bearish This pair has been able to continue its slow and steady downward journey. There are occasional shallow rallies in this market, which often lead to renewed ‘sell’ signals. The Euro is very weak right now, and the market has a high probability of remaining bearish next week (even in this month of August). The probability of the market remaining bearish is currently far higher than the probability of it turning seriously bullish. A trend is not over until it is actually over. USDCHF Dominant bias: Bullish What can happen next with USD/CHF? Since this pair negatively correlated with EUR/USD, it should go upwards as the latter goes downwards. The possibility of the uptrend continuing is very high, but there is an impediment to be overcome: the great resistance level at 0.9100. Just like the support level at 0.9000 (which gave bulls an extremely tough time before it was finally breached), the resistance level at 0.9100 is another barrier. However, this barrier must be broken for the bullish bias to continue, even if it is going to be a pyrrhic victory. Meanwhile, the support level at 0.9000 is a great barrier to bears, and any bears trying to break it could well be hurling themselves against a rock. GBPUSD Dominant bias: Bearish As Cable is positively correlated with EUR/USD, it should also continue trading downwards in the absence of an unexpected event to catapults price skywards. With the Bearish Confirmation Pattern in the market, price could well reach the accumulation territories at 1.6800 and 1.6750. USDJPY Dominant bias: Bearish The US Dollar may be strong in other regions, but not against the Yen. In fact, most JPY pairs are bearish, and USD/JPY is no different. There is a ‘sell’ signal in the market, suggesting that price could head for the demand level at 101.50. The supply level at 103.00 should check any serious bullish breakouts, but a challenge to that 103.00 level could invalidate the bearish outlook. EURJPY Dominant bias: Bearish As a result of the weakness in the Euro and the strength of the Yen, this cross has become very weak. Long trades are no longer sensible here, as price could reach the demand levels at 136.00 and 135.50 next week.
Posted on: Sun, 10 Aug 2014 19:17:15 +0000
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