Weekly Commentary: 29th June 2014

Previous weekly commentary: Commentary on 22nd June 2014

Hello Traders,

The USD index is finally moving lower. As mentioned last week, the market is testing the $81 resistance but the move lower is a healthy sign. My guess is that it will test the $79 level and if it breaks below it, the dollar will continue its longer term bearish move.

On top of that, as the mid year is closing in the coming week, traders can adjusting their positions, I wonder what will the next half of 2014 bring us. With that, let’s take a step back and see where the market is heading in the coming week.

The following is my watch list for the week:

29 Jun - EURUSD Daily Forex Chart

(Click on image for larger view)

  • EURUSD – As mentioned on the 8th June (see article), the low test bar was testing the trend line support. While it was consolidating hard since then, it has been holding on pretty well. What is more interesting is that, inline with the USD index, price looks like it’s ready to move again. Will it move higher? Will the trend line continue to hold? Let’s wait and see.

29 Jun - USDJPY Daily Forex Chart

(Click on image for larger view)

  • USDJPY – I was looking for short confirmation on the 13th April (see article) but I only got a test of the previous low in the middle of May. Looking at the chart above now, the yen is making a classic descending triangle.

As I write this post, the yen has been consolidating for nearly 4 months now and the preview test of the low formed a double bottom. Just to be clear, this is not an uncommon phenomenon. In fact, I like it because I look forward for a strong break out every time it consolidates like that. Moving forward, the next question we all have is this – when will it move again? I guess that’s the million dollar question we all have.  While I don’t know the answer, my only advise is, be patient.

29 Jun - NZDUSD Daily Forex Chart

(Click on image for larger view)

  • NZDUSD – On the 1st June (see article), I found myself looking at a short setup. Unfortunately, that was not a fruitful trade. Fortunately though, it was a break even trade. This is normal in the trading world and you want to do as much as possible to protect yourself with break even positions as a worst case scenario. That is one of the secrets to protecting your trading account.

Looking at the chart right now, you can see that price is moving higher again. In fact, this is inline with my commentary on the 13th April (see article). While price action on the smaller timeframes is useful, the bigger picture still dominates. With that, I look forward to see how price reacts at the market extreme.


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

Note: A gentle reminder that Non-Farm Pay day is on Thursday this coming week as it’s a public holiday in American on Friday. 


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