Hello Forex Traders!
Summer time trading is coming to an end as the end of August arrives and the month of September is around the corner. Hope you had a great weekend.
Before we dive into our usual weekly analysis, please note that you are able to find our comprehensive video analysis via this link “Massive Weekly Candles”. To find out more about the real secret of approaching the Forex market, take a look at this article on “Trading Success Formula in Forex.” And read here about programming your own EA!
Last week’s GBPUSD weakness caused a very bearish weekly candle to emerge on the Cable. The downside motion was triggered when the currency pair was forming a rising wedge with divergence on the 4 hour chart. All of this price action unfolded just 30 pips before the massive daily resistance at 1.5750, almost creating a double top chart pattern.
The GU weekly bearish candle could be a first confirmation of downside looming around the corner. There are, however, some key horizontal support levels every Forex trader should be aware of. These levels are pivotal for the bears and bulls and could mark the winner of this tug of war game.
1) Last week’s low and 4 hour support level at 1.5540
2) The daily bottom at 1.5420
3) 4 hour high at 1.5640
4) Last week’s high at 1.5717
5) Major top at 1.5750
For more details regarding the technical analysis picture of the Cable, I will refer you to last week’s article on “GBP trades ahead”, which provides more in depth coverage of the charts. Compared to last week I wanted to add the importance of the weekly candle and emphasize the crucial support or resistance levels. I will only be actually trading this currency pair upon the break of last week’s low in combination with a bearish chart pattern OR upon the break of the 4 hour high with a bullish continuation chart pattern (with extreme caution when approaching the 1.5710-1..5750 area).
The potential reversal seems to be happening at around the 0.85 level, where we can also support lines (varying shades of green) nearby. A resistance level around 0.86 has divided the massive range of the EURGBP in two parts ever since the beginning of the zone (March 2013). A break through that level might see the EURGBP retest the resistance zone at 0.87 and a renewed attempt for a break of the weekly trend line.
The USDJPY is still manoeuvring in the well built triangle. Two weeks of bullish price action has brought price back to the top of that triangle. A break out and a hook back to the broken levels could be a great trade that awaits us Forex traders. Make sure to read this article on the upcoming news event on the Yen.
Last but not least the EURCAD currency pair. The CAD weakness has provided us with some great trades last week on the EURCAD, but also the GBPCAD and USDCAD. Last’s weekly candle was very bullish with a massive candle towering out of the consolidation zone.
I am keeping a keen eye on this currency pair! The next weekly resistance is still a while from here (around 1.43-1.44) and any pullback down might a simple retracement for more uptrend power. The best methods for entry are either upon the break of last week’s high and a bull flag chart pattern, OR if the retracement were to go back deeper closer to last week’s low.
Are you looking to trade any of these currency pairs? Let us know what is on your weekly watch list?
Thanks for sharing this article and wish you Good Trading!!
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