Weekly Forex Chart Analysis, April 7th – 11th 2014

EURUSD – Euro/dollar bears remain in control, but market is at support

The EURUSD pushed up into the 8 / 21 day EMA resistance layer early last week but subsequently sold off as the bearish momentum continued as we discussed as a possibility in last week’s weekly forex price action outlook. On Friday, the EURUSD lost ground but did pare a lot of its losses late in the day to end right at the 1.3700 support level we’ve been talking about recently. However, the market clearly has been losing ground recently, and we could see this trend continue this week if resistance continues to hold as the market retraces higher. We would consider a sell entry from resistance if a nice daily chart price action sell signal forms this week after a retrace up into resistance.

GBPUSD – Sterling/dollar weakness continues, watching for sell signal from resistance

The GBPUSD has fallen lower over the last four trading days after hitting the resistance area up near 1.6660 which we discussed in our April 3rd commentary. As we discussed in that commentary, we can see a large bearish pin bar formed near this 1.6660 resistance area back on March 13th, setting off a significant down move into 1.6460, where the market found support. Going forward, if the market rotates back up to 1.6660 area, we will look to sell on strength by watching for a price action sell signal from resistance with the potential for a move back down to re-test 1.6460 support area.

AUDUSD – Aussie/dollar bullish run continues pushing higher, looking for buy signal

The AUDUSD gained significant ground on Friday as price continued to hold above the 8 day EMA support after Thursday’s test. Note the small bullish tailed bar that formed Thursday at the 8 day EMA, showing rejection of it. This was not the best signal in the world, but it goes to show that bulls still clearly have control of this market. Ideally, we are looking for an obvious pin bar buy signal or fakey signal to get long after a deeper retrace to support down near the 21 day EMA / 0.9150 area.

USDJPY – Dollar/yen trading range still in play

In light of the strong sell-off on Friday and weekly close back under 103.75 resistance, we are updating and amending our previous USDJPY outlook for this week. The market is still technically confined within a trading range if you look at the weekly chart and the bearish pin bar that formed last week. Given these facts, we would consider a sell entry from that key resistance area up near 103.75 – 104.12 if the market retraces higher early this week and forms a nice 4 hour or daily chart sell signal. If that happens, we could see a larger down move develop of perhaps a couple hundred or few hundred pips, which would put us back at that key support area of the trading range where we could once again watch for price action buy opportunities from support.