Weekly Trading Forecasts for Major Pairs (February 15 - 19, 2016)
Here’s the market outlook for this week:: Content courtesy of Tallinex Limited (https://www.tallinex.com)
EURUSD
Dominant bias: Bullish
EURUSD rose 230 pips last week to top-out at the 1.1350 resistance line before the current bearish correction saw price retreat 100 pips. The bias remains bullish, but price needs to move above that resistance line this week (aiming for the resistance lines at 1.1400 and 1.1450) to avoid bears regaining control.
USDCHF
Dominant bias: Bearish
This pair has proven to be one of the strongest-trending majors. Price dropped roughly 260 pips last week - briefly moving below the support level at 0.9700 before turning upwards and making a shallow bullish effort. However, the current bearish bias will remain valid unless price goes above the resistance levels at 0.9900 and 1.0000 - not an easy task, given the ongoing bearish sentiment in the market. USDCHF is suffering from all-round attacks (EURUSD is up, causing USDCHF to remain under pressure, and CHF itself is strong - affecting all CHF pairs), so the shallow bullish effort is likely to be another short-selling opportunity.
GBPUSD
Dominant bias: Bullish
Cable merely consolidated last week in the context of a medium-term uptrend. Bulls confirmed their presence, but it is possible for bears to subdue them at any time. Movement above the distribution territories at 1.4600 and 1.4650 will reinforce the current bullish stance, but movement below the accumulation territories at 1.4350 and 1.4300 will invalidate it.
USDJPY
Dominant bias: Bearish
Price has fallen 600 pips this week - 1000 pips since January 29. The demand level at 111.50 was tried before the upward bounce on Friday, and presents another opportunity to go short while the bearish trend lasts. The bias on JPY pairs is currently bearish, but that does not rule out the possibility of rallies before the end of this month.
EURJPY
Dominant bias: Bearish
This cross experienced a large pullback last week - falling 450 pips and reaching the demand zone at 126.00 as EUR strength proved unable to withstand the JPY assault (also true for some other EUR pairs). It is logical to assume further southerly movement due to a strong Bearish Confirmation Pattern in the market, so upward bounces can be ignored while it is clear that bears are in control.
I’d like to conclude this forecast with the following quote:
“Almost all of my trading is mechanical — 100% based on rules I have tested and found to be valid. I tend to ignore news of the day, fundamental information and adverse “big picture” scenarios because these do not impact my systems greatly. Sometimes, these factors affect my results in the short term, but over the long term, the systems have a positive expectancy.” - Kevin J Davey
Azeez Mustapha
Currency Analyst
Tallinex Limited
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