Hello Traders!
Welcome back to another week of FX Analysis!
(Aside: Every week before I write the FX Weekly Analysis, I always like to look at the projection path that I had drawn the previous week. Directionality is the whole point of the forecast but being able to draw a projected path, I think, requires even more skill than simply picking a direction. There are so many possibilities for paths as opposed to simply saying “up or down”.)
Monthly Chart
Weekly Chart
Daily Chart
H4 Chart
Commentary / Technical Forecasts
USD/CAD [Long]: That weekly trend line is still holding price down but on Friday, with news release (I think?), price managed to surge past the trend line. So this means a) the bears were caught off guard or b) weren’t really defending the level properly or c) my trend line is off. The move down didn’t start until after price broke the trend line that I have drawn.
Ignoring this news spike, there’s an ascending triangle on USD/CAD that I expect to break out sometime next week. Doing so would allow more upward movement since the only thing stopping it right now is the weekly trend line. Beyond that, the monthly trend line isn’t coming up for at least another 250 pips.
AUD/USD [Short]: Price broke the middle H4 trend line and the bottom H4 trend line. With both upward trend lines broken within the same week. It looks like market momentum is changing, so I’ve drawn a new projected trend line to follow and projected the movement as well. Price will probably try to break the resistance level then bounce down to continue in the newly formed downward channel.
Alternatively, a lower probability move would be price goes back inside the old upward channel and continues up. The only reason why this might happen is if the break of both upward trend lines was due to news spikes instead of real price movements. I say it’s a low probability due to correlation to the other pairs but this wouldn’t be the first time that AUD/USD moves in the opposite direction.
EUR/USD [Short]: Both the resistance level and upper H4 trend line held this week which shows the downward channel is still in play. But given the support level has yet to break (it only got punctured this week), there’s a possibility of a consolidation range forming next week.
I’m only considering this possibility since price bounced off the support level nicely at the beginning of the week. If this doesn’t happen then the upper trend line should still hold as price goes back up to it on Sunday/Monday then bounce down to break the support and continue down the downward channel.
GBP/USD [Short]: Price broke the daily trend line then consolidated. I suspect price will attempt to break the resistance level again and probably fail. This rejection will lead to price continuing down below the daily trend line, which shouldn’t be an issue since price has already broken it once this week.
We’re rolling into holiday season now, so expect liquidity/volume to drop over the next several weeks.
So until next week, remember to trade safe!
Brian