Weekly Commentary: 2nd Feb 2014

Previous weekly commentary: Commentary on 26th Jan 2014

Hello Traders,

Looking at the USD index now, I’m starting to like what I see. While there seems to be a short term resistance around $81.50, price has been making higher lows – this started since end of October, followed by a higher low in mid December and the latest low was on the recent Monday. In other words, price seems to be forming an ascending triangle.  With more news being release in the coming week, I shall wait for more confirmation for this to happen.

The following is my watch list for the week:

02 Feb - AUDUSD Daily Forex Charts

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  • AUDUSD – My bias on AUSUSD has been quite bearish for awhile. However, I realised that price action isn’t exactly in agreement. Hence, I thought I should take a step back to see what’s happening in the bigger picture. Looking at the chart above, price seems to be in a nice downward channel and it is currently testing the bottom of the channel. While there is a possibility that price will go lower, the channel shows that price is probably slightly oversold and wants to do a pullback before going short again. With that, I need more clarity before I take another position on this pair.

02 Feb - AUDNZD Daily Forex Charts

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  • AUDNZD – As mentioned on the 19th Jan (see article), there is a long term support zone between 1.05-1.06. While price has been pretty bearish since end of 2011, the engulfing bar on a weekly chart (off that support zone) looks like it’s the first sign that the bulls could be back. With that, I will be keeping a close eye for more bullish confirmation.

02 Feb - EURGBP Daily

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  • EURGBP – Inline with the consolidation that we are seeing on the EURUSD and GBPUSD, this cross pair is also consolidating. As shown above, a wedge pattern is shaping up. With that, I’m looking forward for another breakout.

Thank you for reading and happy trading week! Post any questions or comments that you may have at the box below.


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