Weekly Chart Analysis – 21 March 2016

Weekly Chart Analysis – 21 March 2016

Weekly chart analysis covers EURUSD, GBPUSD, AUDUSD.

The report looks at the daily and intraday charts to gauge the price action behaviour.

Weekly Market Risk Events:

Tuesday, March 22nd @ 5:30am – AUD – RBA Gov Stevens Speaks
Tuesday, March 22nd @ 9:30am – GBP – CPI y/y
Tuesday, March 22nd @ 10:0am – EUR – German ZEW Economic Sentiment
 
Wednesday, March 23rd @ 9:45am – NZD – Trade Balance
 
Thursday, March 24th @ 9:30am – GBP – Retail Sales m/m
Thursday, March 24th @ 12:30pm – USD – Core Durable Goods Orders m/m
Thursday, March 24th @ 12:30pm – USD – Unemployment Claims
 
Friday, March 25th @ 12:30pm – USD – Final GDP q/q

Price charts and Daily setups EURUSD

EURUSD: 30min – 4h – Daily view

It was another interesting week in the markets. It seems like Central Bankers have this thing going on of fooling traders. This time almighty Janet Yellen came out with rather dovish statement for the rest of 2016. Given good data on GDP, inflation, markets expected FED to deliver more promises around monetary policy. Dollar sold off heavily during and after FOMC press conference.
As last week, it difficult to analyse the price action after such an aggressive moves driven by purely fundamental factors.
As mentioned before, EURUSD is in technical uptrend since 1.0820. In this case higher prices must be assumed and long positions can be established on pull back towards the support – former resistance.
On daily charts, EURUSD is getting close to the psychological level and a major resistance around 1.14. Once this level is taken out, we could expect some further correction.
Moving on to intraday.
The next valid support for this market sits around 1.12. The price could pierce this level and move lower. Another good level of support could be established around 61.8% Fib retracement at 1.1150.
For any short positions, I would like to wait until the price prints at least lower high (below 1.1050 before I would consider short setups.
Keep in mind, EURUSD tends to correct to the downside after closing the previous week near the highs. This is the case this time.
Short positions could be entered at the open of the week with target around 1.1050.
Stops above the last week’s high 1.1340
Bulls @ 1.1200 or 1.1150
Bears @ have to wait for the break below 1.1050

EURUSD Daily View

EURUSD
15-30 min view

GBPUSD

GBPUSD: 30min – 4h – Daily view

Cable corrected after staging an impressive rally during the last two weeks. After closing the week above 1.44, we saw it come down to 1.4050 before FOMC meeting. Great Average Earning report help the Cable to recover. Yellen’s bearish talk also helped GBPUSD to print another leg up.
Looking at daily charts, the current level of 1.4480 still stands as technical resistance. Although the price closed above 200MA, I would still consider it as a fake rally and an opportunity for bears.
Signals are mixed.
Looking at most recent Commitments of Traders report, I see a huge change in sentiment in favour of higher prices in this market but the price action suggests a deeper correction. Personally, I would stay away from this market until more clarity is in place.
Nonetheless, GBPUSD is in a technical uptrend and bullish positions could be considered. The next support could be established around 1.4250. This is the former resistance and 38.2% Fib retracement.
For bears, the price would have to form new higher low and breach it to the downside first. After such pattern, bearish positions could be entered on pullbacks. As of the moment, I don’t see any clear bearish setup.

Bulls – 1.4250
Bears @ Wait for the break of 1.42

 

GBPUSD Daily View

GBPUSD
15-30 min view

AUDUSD

AUDUSD: 30min – 4h – Daily view

Aussie had another great week. I was expecting a pullback from the last week’s highs at 0.7570, but AUDUSD reversed to the upside after very short correction. It printed another multi month high and closed the week above 0.76. As mentioned before, this level is a major resistance. It was a strong and responsive support back in 2015. It is likely that this level will be recognised by traders once again.

Bears could see the current levels of 0.76 as a resistance. The logical target lays around 0.7320, another important support – former resistance.

Bulls could wait for 0.7320 to enter more longs. These positions could be established for the long term ripping the benefits of carry trade.

I issued a SHORT AUDUSD TRADE

AUDUSD Daily View

AUDUSD
15-30 min view