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Friday, April 25, 2014

Weekly Trading Forecasts on Major Pairs (April 28 – May 2, 2014)

Here’s the market outlook for the week:

EURUSD
Dominant bias: Neutral
The overall bias on the EURUSD is neutral because the market has been in an equilibrium phase for about two weeks. While there is currently no directional bias on this pair, momentum would soon return to the market, which would cause a significant movement in one direction. The most probable directional movement could be towards the north (as confirmed by the price action). Should this happen, one may be looking at the resistance lines at 1.3850 and 1.3900 as targets for long trades. 

USDCHF
Dominant bias: Bullish
This market is bullish but the situation remains precarious. It is so precarious that a movement below the support level at 1.8800 is enough to render the bullish outlook invalid. For the outlook to continue to make sense, the price needs to rise above the resistance level at 0.8850; although the logical target for the bull is at the resistance level of 0.8900. One thing is sure: when serious momentum returns to the market, both the EURUSD and the USDCHF cannot go in the same direction, for they are negatively correlated when the trend is strong.

GBPUSD
Dominant bias: Bullish
This currency trading instrument is still able to maintain its bullish trend, which has been on for several weeks. Here, noteworthy pullbacks proffer opportunities to go long, provided the pullbacks do not override the dominant outlook. The price may end up reaching the distribution territory at 1.6900; it could even go beyond that if the buying pressure is strong enough. Any pullbacks along the way could be contained at the accumulation territories of 1.6750 and 1.6700.

USDJPY
Dominant bias: Neutral
The recent events in the market have made it difficult for the price to go determinedly upwards. The price has also not gone determinedly downwards – hence the neutral bias. Nevertheless, momentum would soon return to the market, which would make the price break out upwards and close above the supply level at 103.00, or break below the demand level at 102.00. The possibility of the price breaking below the demand level at 102.00 is greater because of the perceived weakness in this pair.

EURJPY
Dominant bias: Bullish
It can be said that this cross is also trendless, though the bullish determination can still be perceived. In spite of the struggle between the bulls and the bears, the bears have been unable to drag the price too much downwards. The support zone at 141.30 is a barrier to the bears’ interest; and when price goes out of balance, the bulls may also want to push the price above the supply zone at 142.00, and then the supply level at 142.50. 

This forecast is concluded with the quote below:

“Well the truth is that never before in history have we been more able or have we had more tools at our disposal to fine-tune and isolate risk than at present.” – Dirk Vandycke 



Eye-opening trading lessons: http://www.harriman-house.com/experttraders

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