Just a Reflection
This week’s market operation. particularly on the majors, was dominated by fundamentals. However, htf technical reaction levels or zones (particularly on W1) held. This points to the need for scenario analysis and trading; that is, analyzing probabilities on both the bullish and bearish sides of the market, and then wait for confirmatory signals, particularly on an htf higher than our entry htf.
Trade safe.
Trap
It also points to the importance of mapping and being aware of the immediate technical reaction zones (e.g. on W1 or D1 tf) above and below (supply/demand or resistance/support) current location of price action.
Trade safe.
Trap
XAUUSD Weekly Technical Outlook
XAUUSD market operation got a bullish nudge with the printing of a bullish candlestick in July that rejected the horizontal support at the 1767.30 area. This situation arose after a sideway operation that was in place between May and June – the June bearish print having mitigated the May bullish print. Meanwhile, the 1767.30/1743.60 area (green) is the prevailing horizontal support on the monthly time frame, while the 1911.80 area is horizontal resistance.
Market operation on the weekly time frame is in a sideways mode just above the 1767.30/1743.60 horizontal support area (green) seen on the monthly time frame after the northward retracement of the bearish swing of six weeks ago. This is a pause in the market, and we should await a follow-through directional momentum after a breakout from the area.
On the daily time frame, price action went into consolidation after a 50 Fib retracement of the 1902.90/1750.50 downward swing. On Friday, it printed a bearish candlestick from the area, giving bears an opening to push for a southward turnaround. This may initially lead to a retest of the 1792.40/1786.90 minor horizontal support area (purple). Should bears succeed in this, they may push for a retest of the 1767.30/1743.60 major horizontal support area (green) seen on the monthly time frame.
I may be wrong. Trade safe and prosper.
Trap
USDCAD Weekly Technical Outlook
Although, the technical structure of the USDCAD is bearish, its market operation is presently in a bullish mode. On the monthly time frame, there was a bullish rejection of the 1.20300 multi-year horizontal support (green) in June. However, there was a limited bullish follow-through in July, resulting in the printing of a long-upper shadow doji. This indicates that bears are still influential in the market.
On the weekly time frame, the technical structure is bearish. In the last three weeks, an evening star pattern was formed at the 1.26300/1.25000 supply zone (red). Technically, we may see a bearish continuation thereafter.
The 1.23020/1.28080 (blue) is the prevailing trading range on the daily time frame. Price action is bearish within the range but presently in a sideway mode. We may see a bearish continuation to the 1.23020 area. Nevertheless, unless the area is broken down significantly on a daily closing basis, bulls may force a northward turnaround. Alternatively, any bullish reaction for further northward move may be a pullback to retest an area of value before a bearish turnaround. It will take a significant bullish breakout of the 1.28080 area on a daily closing basis before we can have confidence in a bullish directional control.
I may be wrong. Trade safe and prosper.
Trap
EURUSD Weekly Technical Outlook
The EURUSD market still has a bullish technical structure even though it is under increased bearish pressure. On the monthly time frame, the candlestick printed in June was strongly bearish and broke far below the bullish print of May having rejected the prevailing horizontal resistance around 1.22720 (red). However, there was no significant bearish follow-up in July as the market operation was primarily sideways leading to the printing of doji-like candlestick with a bullish tinge. Meanwhile, although market operation surged towards the horizontal support around 1.17160 (green), it failed to breach it.
Although market operation on the weekly time frame is in a bullish mode, the prevailing technical impulse is bearish. Last week, market operation printed a bullish candlestick that retested an area of consolidation that was broken down three weeks ago. From within the area, market operation experienced a bearish opposition, leading to the printing of a bullish candlestick with an upper shadow. The consolidation area, which is at the 1.18600/1.19320 zone (magenta), should be watched this week.
The daily time fame shows a bearish technical structure. But presently price action is sideways after a bullish retracement into, and retesting of, the broken down 1.18600/1.19320 previous horizontal support area (magenta). Friday’s price action produced an ambivalent candlestick with a bearish tinge in the area. It will take a significant bearish breakdown of the area before we can have confidence in a southward continuation, realizing that the next significant horizontal support is around the 1.17160 area (green). Any bearish misstep may incentivize bulls to engineer liquidity grab northwards of the 1.18600/1.19320 previous horizontal support area (magenta) before a bearish turnaround.
I may be wrong. Trade safe and prosper.
Trap
GBPUSD Weekly Technical Outlook
The GBPUSD market is sideways. On the monthly time frame, market operation produced a bullish print in May which was effectively negated by the bearish print of June. But the July market operation produced a doji-like candlestick with a bullish tinge. Although the environment presently favours bulls, bears are still in contention.
Market operation on the weekly time frame is bullish after the bullish print of last week that pulled back into the broken-down horizontal consolidation channel at the 1.37600/1.39300 zone (purple). Although the bullish print surged above the zone, it closed just within the zone, indicating that bears are still influential in the market. Technically, the relatively big bearish candlestick printed seven weeks ago is still operating as a ‘master candlestick.’ This technically gives bears the potential to sbe influential in market operation.
On the daily time frame, on Thursday, price action completed a 61.8 Fib retracement of the 1.41850/1.35700 downward swing. There was a bearish print on Friday, which is potentially a signal that bears would contend for market influence, and this may lead to a southward continuation. What price action does on Monday should be watched.
I may be wrong. Trade safe and prosper.
Trap
Most major pairs were mixed against the US dollar in European and US trade. The euro currency eased from above near US$1.1890 to lowe’s near US$1.1855 and was near US$1.1865 at the US close.
The XAUUSD market is technically under increased bearish pressure and I expect it to be so this week. I will post my technical outlook on this and three other pairs before the market opens.
Stay safe.
Trap
XAUUSD Weekly Technical Outlook
The XAUUSD market is under a bearish pressure. On the monthly time frame, a bullish inside bar formation was printed in July under the influence of a relatively big bearish candlestick which was printed in June. Meanwhile, market operation is at the 1750.00 horizontal support area (purple). This is about 250 pips from the 1730.00/1704.00 demand zone (green).
Market operation on the weekly time frame is technically under a bearish impulse. Market operation retested the 1879.00/1901.30 supply zone (red) 11 weeks ago before it was rejected southwards. There was a strong bearish drive eight weeks ago before a bullish retracement. However, the relatively big bearish candlestick printed last week erased the bullish retracing candlesticks of more than five weeks. This indicates that bears are more influential in the market. We may expect bearish continuation for a retest of the 1730.00/1704.00 demand zone (green) seen on the monthly time frame. But, first, the nearby technical reaction area around 1739.00 will need be broken down by bears.
The order flow context and prevailing market impulse on the daily time frame favour bears more than bulls.
I may be wrong. Trade safe and prosper.
Trap
USDCAD Weekly Technical Outlook
On the monthly time frame, the USDCAD technical structure turned bearish in May after a breakdown of the 1.22800 area (green). But, meanwhile, market operation is in a bullish retracing mode after a relatively big bullish pullback broke above the broken-down 1.22800 area in June. In July, a doji-like candlestick with a long upper tail was printed, which indicates that bears are still in contention for market influence.
On the weekly time frame, market operation retested the 1.27060/1.28730 supply zone (red) three weeks ago and rejected it with a bearish pinbar. Meanwhile, market operation is sideways, with the last print being bullish. We may see a bullish retracement but the technical structure favours bears more than bulls. Thus, any bullish move is likely to be temporary in nature.
Price action on the daily time frame is presently in a bullish mode even though the technical market structure is bearish. On July 19, price action retested the 1.27060/1.28730 supply zone (red), and a horizontal resistance zone, seen on the weekly time frame. It met with a bearish rejection, leading to the breakdown of a rising trendline (blue) on July 29. Meanwhile, price action is in a bullish mode and will likely retest the rising trendline and, probably, even the 1.27060/1.28730 horizontal resistance zone before any bearish turnaround. Nevertheless, we should not rule out the probability of bears seizing on any bullish weakness or misstep for a southward turnaround.
I may be wrong. Trade safe and prosper.
Trap
EURUSD Weekly Technical Outlook
In December 2020, EURUSD market operation rejected the 1.21940/1.24720 supply zone (red), and multi-year horizontal resistance, on the monthly time frame, but there was a retest of the zone in May 2021 before a southward turnaround. Technically, the EURUSD is under a bearish pressure, although on the monthly timeframe market operation was sideways in July. Further bearish drive will likely see the completion of an ‘M’ pattern around the 1.16000 handle (green).
On the weekly time frame, the printing of top-wicked candlesticks over several weeks at the 1.21940/1.24720 supply zone (red), and a multi-year horizontal resistance, seen on the monthly time frame technically favours bears. Recent order flow context, particularly with the bearish swing that began eight weeks ago, shows the intention of bears to maintain market influence. Furthermore, the fact that last week’s market operation printed an indecision candlestick as opposed to the bullish retracing print of two weeks ago indicates a weakening of bullish pressure. Thus, on the weekly time frame, the technicals give an edge to bears.
The 1.23430/1.16000 range (blue) is the prevailing trading range on the daily time frame. Price action is presently southwards and at the lower part of the range. Technically, we can expect further bearish move to retest the lower boundary of the trading range around 1.16000 before significant bullish resistance.
I may be wrong. Trade safe and prosper.
Trap
GBPUSD Weekly Technical Outlook
GBPUSD market operation is within the wide 1.19600/1.42800 horizontal channel (blue) that began in October 2016. On the monthly time frame, the February bullish print retested the 1.42800 upper channel boundary or resistance line. Since then, subsequent market operation was limited to respecting the channel resistance as a sideway mode was maintained below it. The June bullish market operation made a strong challenge of the resistance line but failed to breach it, and bears seized on the bullish misstep to push for a southward mode in July. Technically, the GBPUSD is in a sideways mode on the monthly time frame.
On the weekly time frame, market operation broke down a rising trendline (red) eight weeks ago. However, there has been limited bearish follow-through since then. Meanwhile, market operation is in a bullish mode, apparently to retest the breached rising trendline or the value area around 1.41000/1.41900 zone (magenta). However, there is an increase in bearish pressure. The bullish candlestick printed two weeks ago has an upper wick, and the bullish candlestick printed last week was small. We may see bears seize on the bullish weakness to push for a southward rotation to, initially, fill the wick of the bullish pinbar printed three weeks ago.
On the daily timeframe, the 1.42400 area (purple) has held as a major horizontal resistance since the bullish swing from the 1.35600 area (navy) on February 4. On July 20, price action retested the 1.35600 area (navy) and rejected it with a bullish drive. Meanwhile, price action is sideways after making a 61.8 Fib retracement of the 1.41320/1.35700 bearish swing. Technically, the market is under bearish pressure, and we will likely see a southward continuation.
I may be wrong. Trade safe and prosper.
Trap
To any trader who may be tempted to jump into the XAUUSD market now, unless you are a scalper, it is advisable to wait until the daily close. The 1750.00 horizontal support area is not yet broken down. If this happens at today’s daily close, the market structure would be technically favourable to bears. Then a bearish setup upon a northward retracement on a lower time frame could be considered.
I may be wrong. Trade safe and prosper.
Trap
GBPJPY price action is retesting the 153.00/153.40 supply zone (purple) on the daily time frame. On the H1 tf, we may see a bullish engineering for liquidity around the 153.15 minor horizontal technical reaction area, an area of value that could yield a feasible bearish setup.
I may be wrong. Trade safe and prosper.
Trap
XAUUSD Weekly Technical Outlook
The XAUUSD market is in a bearish mode. On the monthly time frame, although the candlestick printed in July was bullish, the interim August market operation is bearish. However, there has been an increased bullish pressure after a bearish surge to the 1863.00 significant horizontal support area (green) earlier this month.
On the weekly time frame, technically, market operation is in a falling triangle (blue). Last week, a long-tailed bullish candlestick rejected the 1863.00 significant horizontal support area seen on the monthly time frame – an area which is the base of the falling the triangle, before retracing to the lower area of the bearish candlestick printed two weeks ago. Technically, the market was under a bearish impulse, and it is being resisted by bulls. We may see bears make further attempt to regain market influence and this could lead to a retest of the 1863.00 handle.
On the daily time frame, price action is in a bullish retracing mode under a bearish technical environment. The market is trading below the 1809.40/1812.15 supply zone (magenta), and until price action significantly breaches the zone northward, any bullish move will likely be temporary in nature. The order flow context favours bears.
I may be wrong. Trade safe and prosper.
Trap
GBPUSD Weekly Technical Outlook
The GBPUSD market is ambivalent. On the monthly time frame, the 1.37670/1.42420 zone (purple) is the prevailing horizontal channel for market operation, which is presently at the lower boundary of the channel.
Market operation is in a consolidation on the weekly time frame at the lower part of a larger horizontal channel in the 1.37670/1.42420 zone (purple) seen on the monthly time frame. Four weeks ago, there was a bearish drive that broke below the consolidation area and the technical structure at the 1.36400 area before retracing northward to close within the consolidation area. This showed the intention of bears to dominate market operation and to break down the current technical structure for a southward continuation; this coming after the relatively strong bearish drive of nine weeks ago.
On the daily time frame, price action is in a falling wedge (blue). Presently, it is making a bullish retest of the wedge resistance trendline and about 30 pips below the 1.38850/1.39460 supply area (magenta). We may see further bullish move to retest the 1.38850/1.39460 supply area (magenta). However, it will take a significant bullish breach of the area before we can have confidence in any bullish directional change. Meanwhile, bears are favoured to push for a southward turnaround after a bullish retracement to an area of value.
I may be wrong. Trade safe and prosper.
Trap
EURUSD Weekly Technical Outlook
The EURUSD market is under increased bearish pressure. On the monthly time frame, the bearish candlestick printed in June broke below the 1.22500 multi-year horizontal resistance (red). Although, market operation printed an indecision candlestick in July, the interim market operation in August is bearish.
On the weekly time frame, market operation has been largely in consolidation after the relatively strong bearish drive of nine weeks ago. Meanwhile, market operation is tackling the horizontal support at the 1.17090 area (light green) and the bullish candlestick printed last week is in opposition to the bearish print of two weeks ago. Technically, bears are still favoured more than bulls, but we may still see further bullish move in the early part of this week before a bearish turnaround.
Price action on the daily time frame is in a bullish retracement, potentially to retest the 1.18630/1.18950 supply zone (magenta) or to engineer liquidity grab at the 1.19500 value area. Basically, we may still have further bullish move in the early part of this week before a bearish turnaround.
I may be wrong. Trade safe and prosper.
Trap
You may enjoy the bearish drive on the EURUSD as long as it lasts but be wary of the 1.16000 area, just a few pips away. Until the 1.16000 horizontal support area is broken down significantly on a daily closing basis, we should not linger on a sell-trading position.
I may be wrong. Trade safe and prosper.
Trap
XAUUSD Weekly Technical Outlook
The bearish pressure on the XAUUSD market still subsists. On the monthly time frame, market operation broke below the 1829.40/1766.60 area of consolidation (purple) before snapping back into it. Technically, market operation is a complex correction of a bearish downward swing that began in August 2020.
The market operation on the weekly time frame is in a symmetrical triangle (blue). Presently, it is in a consolidation mode near the lower part of the triangle. The bullish pinbar that formed two weeks ago had no follow-through last week. The technical impulse is more favourable to bears than bulls.
Price action on the daily time frame is within a wide triangle (blue) and it is in a bullish retracement of a downward swing, and the 1807.00/1832.30 supply zone (magenta) is still intact. Presently, price action is in a sideways mode at the 61.8 Fib retracement area of the downward swing, and we may expect a bearish turnaround from the area. The order flow context favours bears more than bulls.
I may be wrong. Trade safe and prosper.
Trap
USDCAD Weekly Technical Outlook
The USDCAD market has been operating within the 1.20530/1.40730 range (purple) since February 2016. In May 2021, there was a strong bearish drive towards the 1.20530 lower boundary area but a bullish fight back since June has kept market operation within the range. Meanwhile, market operation in August tested the 1.29500 horizontal resistance area (red) but met with a bearish challenge. As the 1.30260/1.34100 supply zone (blue) is still intact, technically, we are still in a bearish environment even though the market operating mode is bullish.
Market operation on the weekly time frame is in a bullish retracement of a bearish impulsive move. Last week, it made a bullish challenge of the 1.29500 horizontal resistance (red) but was repelled, which resulted in the printing of a bullish candlestick with an upper shadow. The 1.30260/1.34100 area (blue) is a supply zone on the monthly time frame and could be a target for any further bullish operation. As we are technically in a bearish market, any bullish misstep would incentivize bears to trigger a southward turnaround.
USDCAD price action on the daily time frame is in a rising channel (red). There was a bullish run within the channel towards the channel resistance line from Monday to Thursday last week. However, on Friday, the move was checkmated, and price action printed a bearish pinbar as it tackled the 1.29500 horizontal resistance area (red). Although we may see another attempt to retest the 1.29500 area and, perhaps, the channel resistance trendline, but as the general market environment is bearish any bullish misstep would lead to a southward rotation.
I may be wrong. Trade safe and prosper.
Trap
