Hello Forex Traders,
EU WEEKLY BULL
The EURUSD has not only broken the major top and yearly high of 1.3711, but it also posted a weekly candle close above that level with a decent weekly bullish candle. Translation of this weekly candle would be something like this: the bulls kept control of price action throughout the entire week, also towards the end of the week. Or in other words, there was no selling pressure at all.
Therefore, upside continuation seems very likely. But will it happen right now, this week or in the next month of November? Two observations:
1) Price is approaching or has in fact hit the 61.8% Fibonacci retracement level of the entire downside.
2) The trading month of October is reaching an end. Thursday will be mark the end of this month’s trading. Also, a FOMC statement regarding the U.S. will be released on Wednesday. The market could quiet down substantially prior to that.
In any case, any dip down to retrace last week’s weekly candle should find support. Especially if price were to move back towards either the broken top zone at 1.3711 or the sideways zone on the daily chart at around 1.3650 and 1.37, then a bounce and upside continuation seems a very likely scenario. Also a move back to the bottom of the trend channel (light blue) would have the same effect.
Any upside continuation (above last week’s high) however might be limited in its space due to the NFP announcement and the monthly candle closing on Thursday. A slight retrace of this month’s candle in November for more upside seems likely – the same scenario as what happened with this month’s candle retracing last month’s candle.
Number 1 main target is the 78.6% Fibonacci retracement level at 1.43.
GU WEEKLY DOJI
The Cable shows a different story. Last week’s candle was a Doji candle which highlighted the indecision at its current spot. The GBPUSD is entrenched in an uptrend but has major weekly and monthly resistance right in front of it.
It could be facing major obstacles until it either breaks above it or if the daily stronghold is broke at around 1.59-1.60. Until then, I am expecting a lot of choppiness and corrective price behavior – especially for the remainder of the month – but also because the EURGBP is moving smoothly to the upside.
EURGBP is well set in an uptrend channel (light blue). As long as price remains in it, the currency can keep pushing to higher targets such as the -0.618 at 0.8620. If it does break the uptrend channel, then I am still expecting support to kick in at around 0.84 – which is the 61.8% Fibonacci retracement.
Thanks for sharing this article via social media and with friends and wish you Good Trading in the rest of October!!
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