Weekly Commentary: 17th August 2014

Previous weekly commentary: Commentary on 10th August 2014

Hello Traders,

This week was pretty much a quiet week as the USD index closed around $81.40 for the third week. I suspect this is going to be another case of having the calm before the storm. Looking at price action, price gave us an inside bar. More than that, this is actually high test bar too that is testing the $81.50 resistance level (what a significant resistance). That means this is a double high test bar with more consolidation. Ignoring the terminologies, this is also a typical scenario where buyers and sellers are sitting aside, as they start to get impatient, they want something to happen. If everyone who is looking at the same chart, they are starting to gear up now while waiting for a signal to move. As I’m always looking for the market leader, this is where having patience is crucial, and I too shall wait for my signal.

The following is my watch list for the week:

17 Aug - NZDUSD Weekly Forex Chart

(Click on image for larger view)

  • NZDUSD – Since my last commentary on the 20th July (see article), price broke down lower and it’s now testing a new support level. This is an interesting level because, as mentioned on the 29th June (see article), price is actually still in an upward channel. However, moving lower would mean this is the first lower low since mid 2013. Are we in a new down trend or is this only a temporary pullback?

17 Aug - EURGBP Weekly Forex Chart

(Click on image for larger view)

  • EURGBP – It’s been awhile since I talked about this pair and that’s because the pair as been pretty much one-sided, the sellers have been dominating the market for a while – until recently. Looking at the chart about, price has started to pullback and a pullback is only a temporary retracement before it continues to fall lower. In order to plan ahead, I started looking for simple support/resistance levels and this is what I got (above). An old support turned resistance (~0.816) combined with a downward trend line with two touches on the line. Will price turn around the cross of the two (red box)? Let’s wait and see.

17 Aug - EURAUD Weekly Forex Chart

(Click on image for larger view)

  • EURAUD – On the 30th Mar (see article), this pair gave me a completed Head & Shoulder pattern and that was the first sign of a downward market. Since then, price has been moving lower and, on the 15th June (see article), I made a rough indication that price could even fall towards the 1.42 level (which is a strong support – see above), and it did. Just to be clear, I don’t have a crystal ball and these are just probabilities based on patterns I saw. Now, looking at the market again, will price reverse back into the upward market (since July 2012)? Or is this a new lower low back into the major down trend since 2009 (or earlier)? My bias is bullish but my views are meaningless as only the market is knows the truth.

Thank you for reading and happy trading week! Make sure to post any questions or comments at the box below.


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