EURUSD Top Down Analysis

Technically, the EURUSD is northward bearing and has been so for a long while. The recent southward mode, not yet fully recovered, is merely a pullback and for profit taking. The price action on the pair is now entering a significant resistance zone last visited in May 2014 but there is room for further pullback or sideways operation before the zone is hit. This zone is in confluence with, or proximal to, the 68.2 Fib area of the southward drop from the high of May 2014. See attached MN chart (significant resistance zone is bound by magenta coloured lines).

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EURUSD Weekly Technical Outlook

In January 2018, price action on EURUSD entered a resistance zone (1.22550/1.25790) it last trasversed southward in December 2014. Last month’s candlestick printed bullish but with wicks at both ends; indicating that bulls were facing strong bearish resistance. Apparently, we are likely to be seeing some ranging operation of price action in the zone for quite a while.

On the weekly time frame, price action has been ranging around the 1.22290/1.25420 area for four weeks. As price action has found it difficult to break above the resistance zone, it is likely that we see an attempt by the market to bear southward and regroup for another onslaught on the zone. Last week, an inverted hammer-like candlestick was formed around the zone; which portends the likelihood of a bearish follow through of price action in the days ahead. An ascending trendline (chocolate) from the low of April 2017 is still very much in play and bears may target a retest of the trendline. Such a move southward is likely to expose the horizontal support around the 1.20500 area. However, should bears fail to break down the trendline, bulls are likely to seize the initiative to turn around price action northward.

On the H4 time frame, price action has been consolidating in an ascending channel (magenta) for quite a while. Recent price action is bearing southward from the channel rresistance area. An initial target of bears is the channel support or the horizontal support around the 1.22630 area. However, a micro-support trendline (navy) formed by recent price action may be a barrier for a southward move. So, should bears fail to clear this barrier, we may see bulls turn price action northward toward the channel resistance, perhaps to relaunch an attack on the 1.25790 area.

I may be wrong. Trade safe and prosper.

USDJPY Weekly Technical Outlook

Current market on USDJPY may disappoint traders who make buy trading decisions on the basis of ‘oversold’ indicator readings. On the weekly time frame, price action on the USDJPY has ranged in a horizontal channel (bound by magenta coloured horizontal lines) between 108.200 and 114.150 since April 2017. But between January 21, 2018 and first of February 2018, price action consolidated around the 108.360/110.275 area. Last week, a bearish candlestick broke down the channel support, moved below the major consolidation area, and drove down to hit the immediate support around the 105.460 area. However, just before the close of session, bulls resisted further move but it was clear that bears held sway. We may see bears attempt to take price action further southward this week but bulls appear poised to resist the move. Technically, the result of this struggle is likely to be a sideways operation of price action in the early part of this week before further bearish continuation. An initial target of bears is likely to be the 104.330 area, a minor support zone; this may expose the 104.300 handle.

Technicals on the daily time frame are disposed southward. However, the present location of price action is a bit far from the mean. Therefore, we may likely see a northward pullback of price action before any further bearish momentum can be sustained. A possible target of bulls for such a pullback is the immediate resistance around the 107.380/108.040 area. This would be a retest of the horizontal channel support (magenta) broken down by price action last week and flipped as resistance.

I may be wrong. Trade safe and prosper.

EURJPY Weekly Technical Outlook

Price action on EURJPY has been operating in an ascending channel (bound by chocolate coloured lines) for quite a while. On the weekly time frame, price action has been operating above the mid-line (magenta) since June 25, 2017. Two weeks ago, a relatively big bearish candlestick rejected the channel resistance and was followed up by a smaller bearish candlestick last week. However, last week’s candlestick barely managed to break the low of the previous week’s candlestick and was an indecision candlestick by nature. This indicates that bears were not fully in control and bulls are likely to give bears a fight, at least by market open this week. Nevertheless, short-term technicals are synced in support of bears and we may expect bears to attempt a test of the midline or the immediate horizontal support around the 130.500 area, as an initial target.

Looking left on the weekly time frame, as a technical trader I am particularly impressed by a larger ascending channel (bound by black coloured lines) earlier formed and the bearish impulse of the larger trend. I see a similarity of price action in the current ascending channel and the previous one; which gives further weight to a bearish tone of the EURJPY market.

On the H4 time frame, price action is operating in a descending channel (bound by black lines) but a consolidation pattern (bound by magenta horizontal lines) prevailed on the H4 time for much of last week. Nevertheless, technicals on the H4 time frame are favorably synced for a bearish continuation. The immediate horizontal support around the 130.490 area is a likely target of bears. However, as price action has just broken an area of consolidation, we may see a retest of the area before momentum for a southward move is sustained.

I may be wrong. Trade safe and prosper.

On a short-term basis, I am bearish on this pair. A southward break of the micro trendline (navy) on the H4 time frame would get me interested in looking for a feasible sell trade setup. Alternatively, should bears fail to break down this micro trendline on a daily or H4 closing basis, this will negate my bearish outlook.

Trade safe and prosper.

The technical outlook is still bearish on the USDJPY but we should be expecting periods of sideways operation and pullbacks along the way, perhaps until the 100.500 area is reached; still a long way off though.

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Here’s a video on scenarios involving EURUSD, GBPUSD and some majors for this week. I have no financial interest in the presenter.

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If you are tracking XAUUSD (GOLD), don’t feel tempted to go for a long trade. It is better to wait for price action to enter a significant support zone, preferably a weekly time frame support zone. Technically, the market is still bearish but we may see a reaction for a northward turnaround around the 1315.90 area.

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See attached H1 chart; likely turnaround zone is bound by purple coloured horizontal lines.

I may be wrong. Trade safe and prosper.

Are you tracking XAUUSD? Be wary of Gold! Why is price action on Gold ambivalent so far? There is still a target of bears southward; remember yesterday’s post and the zone indicated. Any fundamental news may be seized upon to drive price action to the zone before a northward turnaround.

Trade safe and prosper.

While south-bound intraday traders/scalpers will be excited by the GBPJPY current southward mood, swing traders may have to watch and plan for a probable northward turnaround of price action around the 147.130/146.510 zone (bound by purple coloured horizontal lines in attached H4 chart).

I may be wrong. Trade safe and prosper.

Here’s a video on trading with knowledge of market makers’ techniques. I have no financial interest in the presenter.

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USDJPY Weekly Technical Outlook

Price action on the USDJPY continues to be disposed southward. On the weekly time frame, after a period of consolidation in late January 2018 to the first week in February, bears took price action southward two weeks ago, printing a relatively large bearish candlestick which inched to the immediate support zone around the 105.140 area (magenta). Last week, bulls took price action further northward but the attempt was checkmated by bears, leading to the printing of an inside candlestick; a strong indication that bears are intent on taking price action further southward. We may see bears target the 103.180 area as they push through the 105.140 area (purple) this week. This may expose the 102.350 handle (red). The technical structure on the weekly time frame favours the bears.

Price action on the daily time frame is operating in a descending channel (navy).The candlestick formation and the technical structure are very much in favour of bears. As long as price action does not break out above the channel resistance trendline on a daily closing basis, we can expect bears to continue targetting further southward levels.

On the H4 time frame, although the price action is operating in a descending channel, the bearish candlestick prints are more prominent than the bullish ones, a strong technical indication for further bearish influence. Bears are likely to first take out the minor support around the 105.540 area before we see much resistance from bulls.

I may be wrong. Trade safe and prosper.

EURJPY Weekly Technical Outlook

Price action is consolidating in a wedge on the monthly time frame. Recent price action bore southward from a resistance zone around the 138.150 area. The immediate support zone is around 126.450 area. An inner support trendline (navy) is too far from current price action and may attract bears as a southward target.

On the daily time frame, price action has broken down an ascending channel (magenta) within which it has operated since September 2017. The technical structure on the daily time frame favours a bearish continuation. A likely target of bears is the 127.830 area, which is confluence with the lowest point of the channel support; this may extend to the 126.430 area.

On the H4 time frame, the angle of the descending trendline (navy) suggests a strong bearish mood. We may not see more than a feeble northward pullback until bears take price action further down. The technicals are synced in favour of bears.

I may be wrong. Trade safe and prosper.

GBPAUD Weekly Technical Outlook

The northward move of price action on the GBPAUD is apparently being checkmated by bears. In November 2017, price action broke out northward from a horizontal channel or range (magenta) only to enter another horizontal consolidation of a smaller range for the next three months. Currently, price action on the monthly time frame is bearing northward but with limited momentum. It has inched towards a resistance zone (bound by purple coloured horizontal lines) around the 1.80260/1.82700 but has failed to enter it. This zone is likely to be the immediate target of bulls, more so that they have labored for three months to reach it.

The technicals on the weekly time frame are mixed. An outer ascending trendline (red) is still in play and an inner ascending trendline (navy) is still acting as support to price action. But a resistance trendline (magenta) from the highs of recent candlesticks may be a barrier to northward momentum. Besides, price action is struggling in an attempt to reach the next horizontal resistance. Nevertheless, we may see bulls reach this resistance but bears are likely to hinder further move; this may lead to a southward pullback thereafter.

I may be wrong. Trade safe and prosper.

Consider the analyses done in this video based on market structure. I have no financial interest in the presenter.

Trade safe and prosper.

If you are tracking cable, note that price action on the pair continues its consolidation in a triangular pattern (red) on both the daily and weekly time frames. But there is little room at the moment for directional profit either north or south as both resistance and support trendlines are too close to location of price action. A ‘wait-and-see’ stance will be a good decision at the moment.

Trade safe and prosper.

If you are tracking USDCAD, note that the technicals still favour further northward move and a likely target of bulls is the 1.29160 area.

I may be wrong. Trade safe and prosper.

GBPJPY Weekly Technical Outlook

Yen has been technically stronger than most of its peers since December 2018. The current risk sentiment, with the uncertainties surrounding Brexit negotiation, presents a favorable fundamental condition to be bearish on GBPJPY. Of course, we should be aware that market perception is key and the prevailing market direction should guide our trading. That being said, on a technical basis, GBPJPY continues to bear southward.

On the monthly time frame, a bearish drop from the high of July 2007 to the low of September 2011 was served a retracement around the 61.8 Fib zone in June 2015. The drop from that zone since June 2015 to the low of October 2016 entered the 32.8/50 Fib retracement zone in January 2018. Price action in February 2018 has turned southward from this Fib zone and we may expect further bearish move this month. The bearish candlestick formed in February 2018 traversed two horizontal support zones southward and technically stronger than the most recent preceding bullish candlesticks. Price action has also breached the monthly pivot southward.

On the weekly time frame, price action has been consolidating in an ascending pattern between an ascending trendline (red) from the low of January 2012 and another (navy) from the low of October 2016. Last week, price action broke below the support trendline (navy) and met a barrier at the horizontal support in the 144.810 area. Traders who include wave theory in their analyses are likely to see further southward impulsive wave. The technicals on the weekly time frame are synced in favour of bears and we may see them target the horizontal support around the 138.950 area.

On the H4 time frame, price action since late February 2018 has been primarily bearish and the order flow context has been much in favour of bears. A resistance trendline (magenta) is very much at play. However, bulls attempted to take price action northward in the latter part of last week Friday; by the early part of this week, they may push for a retracement to retest the trendline or the immediate minor horizontal resistance zone around 146.39/147.370. Such a move is much likely to be corrective. But it is important to remember that there is still a support trendline (navy) below, which was seen on the weekly time frame. Therefore, we may not see a sustained southward momentum until this support trendline is broken down by price action on a daily closing basis. A breakdown of the support trendline on a four-hourly closing basis is likely to require a retest before we can have confidence in a sustained southward momentum.

I may be wrong. Trade safe and prosper.

EURJPY Weekly Technical Outlook

Basically, price action on the monthly time frame is in a triangular-consolidation (red) but the mode is southward. Last month the candlestick printed on the monthly time frame was solidly bearish. Although the 132.520 area is likely to be attractive for a bullish pullback, we are likely to see further southward move. The 127.900/820 area is an initial area which bears may target as the area have a lot of low-wicks to retest. Should they succeed in this, bears may then target the next horizontal support around the 126.140 area.

On the daily time frame, price action is operating in an ascending wedge (magenta). The current location of price action is around the wedge support trendline. Should bears break down the wedge support trendline, they will have to contend with a support trendline (deep blue) from the most recent candlesicks before further southward momentum can be sustained.

Technically, the H4 time frame offers possible areas we can expect price action to retrace northward to before further southward continuation. One such area is the 131.730/133.040 zone, bound by red horizontal lines on the attached H4 chart. Price action may not get to the zone before turning around as there are a few minor barriers for bulls to deal with but that is the zone I will be watching.

I may be wrong. Trade safe and prosper.