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Here’s the market outlook for the week:
EURUSD
Dominant bias: Bearish
After consolidating in the months of June and July, 2018, the market has resumed its bearish journey, which it started in April 2018. Last week, price dropped roughly 200 pips, and it has dropped more than 1000 pips since April. This is a bear market and there is still a possibility of price going further downwards, reaching the support lines at 1.1400, 1.1350 and 1.1300. However, the further the market goes south, the higher the probability of a strong reversal.
USDCHF
Dominant bias: Neutral
It is interesting that the bias on USDCHF remains neutral, just as it was last week. The neutrality in the market has been existing since June 2018. Normally, USDCHF should go upwards as EURUSD goes south, but the former has chosen to remain neutral as the latter goes south, hence showing the bulls’ apathy. Should EURUSD skyrocket (something that will eventually happen) there would be a smooth bearish movement on USDCHF.
GBPUSD
Dominant bias: Bearish
Last week, Cable shed close to 250 pips. In this month of August, Cable has shed roughly 350 pips and it has shed at least, 1600 pips since April 17, 2018. There is a Bearish Confirmation Pattern in the market, which points to the possibility of further bearish movements, as price targets the accumulation territories at 1.2750, 1.2700 and 1.2650. While price could reach these targets, it may not be able to go significantly below them.
USDJPY
Dominant bias: Bearish
Unlike EURJPY and GBPJPY, USDJPY did not go significantly lower last week. One reason for this is that, USD is strong in its own right, and until it loses a considerable amount of stamina, a major slide versus JPY may not be expected. Nonetheless, there is already a “sell” signal in the market, and the signal may become more significant as price goes southwards, towards the demand levels at 110.50, 110.00 and 109.50.
EURJPY
Dominant bias: Bearish
This currency trading instrument went downwards by at least, 270 pips last week. Price tested the demand zone at 126.00 on Friday, and then closed slightly above the demand zone at 126.50. All this is happening according to the general bearish expectations on certain JPY pairs in the month of August; therefore the major target for the month is the low of May, which is the demand zone at 125.00. The instrument ought to remain bearish this week.
GBPJPY
Dominant bias: Bearish
This cross dropped by 350 pips last week. It has dropped close to 600 pips this month, and roughly 800 pips since July 16. There is a Bearish Confirmation Pattern in the market, which signals further downwards movement, especially for this week. Thus, a bearish target of at least, 200 pips is anticipated. But that does not rule out probabilities of occasional rallies, which should be transient in nature.
This forecast is concluded with the quote below:
“The less the trade becomes about us and the more about our rules and trading plan, the more we have steered ourselves towards achieving success in the markets on a consistent basis.” – Sam Evans
Source: www.tallinex.com
Trading realities: http://www.advfnbooks.com/books/unlockpotential/index.html
