Hello Forex Traders,
Another week of trading lies ahead of us! The weekend is always a great time to put the charts into perspective. The advantage is that it also allows for quiet analysis without the disturbance of price movement.
The EURUSD has not yet broken the major top at 1.3711 but it sure came close. The weekly candle finished with a very strong bullish candle. Next week could see a partial retracement of this week’s weekly candle and then upside continuation. A break of the top could see an increased volatility so be aware and careful of that. The best approach could be to wait for a pullback after the break.
Here too the GBPUSD posted a bullish weekly candle. The same scenario as the EURUSD applies here for the GBPUSD as well, albeit with one important difference: the space to the upside seems limited due to weekly resistances. These resistances are:
1) Weekly trend line (black)
2) Major tops (red)
There is a lot more space to the upside on the EURUSD than there is on the GBPUSD. Could the EURGBP confirm this?
Yes it has the potential to confirm the above analysis. The currency currently seems to be making a bull flag, which is a continuation pattern. The main confirmation, however, is still pending. And that is a break above the purple trend lines and major top (red) at 0.88.
The AUDUSD has a tremendous bullish weekly candle, which has a 250 pip body but more importantly: this particular candle has not wick on the top or bottom. The translation means: buyers stepped in from the beginning of the week and never lost control throughout the entire week.
With such a power and impulse, the 50% and the -0.272 target confluence at 0.97 will probably only pause price shortly before moving up to the next target which is at 0.99 and the confluence between the 61.8% Fibonacci retracement and the -0.618 target.
The USDJPY would need to break above the top (red line) or below the bottom (green line) before a break out trade could be confirmed. A break to the upside would be with the bigger trend and could see substantial upside potential. The downside break could be limited to the next support at 91.
Last but not least the GBPAUD. Last week was the third bearish candle in a row after the GA failed to break the top. Last week also represented a clear break of the weekly support level and the 23.6% Fibonacci retracement with a candle close below them.
The downside pressure is strong and the next weekly support levels are way lower at the 38.2% Fibonacci retracement level (1.63). It would be great trading if this week saw a retracement of last week’s weekly candle and a bounce off of the broken bottom (red line), which could act as resistance in the future at +/- 1.6875.
Did you notice some interesting weekly candles that are not mentioned above? Do you agree with the above analysis or do you see it differently? Let us down below!
Thanks for reading and sharing this article!
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