Weekly Trading Forecasts for Major Pairs (February 22 - 26, 2016)

Here’s the market outlook for this week:: Content courtesy of Tallinex Limited (https://www.tallinex.com)

EURUSD
Dominant bias: Bullish
This pair dropped slightly on Monday, then moved sideways for the rest of the week. A closer look at the chart revealed a consolidation to the downside, which threatens the recent bullish bias. For the bias to remain bullish, bulls must prevent price pushing below the support line at 1.1000. If bulls succeed then we may see price move upwards this week - ending the current threat to the bullish bias.

USDCHF
Dominant bias: Bearish
USDCHF gained 170 pips last week, but met strong opposition at the 0.9950 resistance level - unable to break above, despite several attempts to breach it. This week, movement will be largely determined by EURUSD. Breaking the resistance level at 1.0000 will certainly be difficult, but could end the current bearish bias, whereas failing to do that could reinforce the bearish bias (which is currently under threat).

GBPUSD
Dominant bias: Neutral
From the high of Monday, price dropped 280 pips to reach the accumulation territory at 1.4250 on Wednesday. That accumulation territory has proven to be a recalcitrant barrier to bears, because price has failed to get below it despite forays into the zone, and this has forced Cable into a neutral phase. The market ended on Friday with a strong upward move, which may be a short-selling opportunity unless the distribution territories at 1.4550 and 1.4600 are overcome.

USDJPY
Dominant bias: Bearish
Price rallied 120 pips on Monday - resulting in a better entry price for sellers. From the high of Tuesday (114.87), price dropped 240 pips to close at 112.64 on Friday. There is a clean Bearish Confirmation Pattern in the market, which indicates the possibility of price reaching the demand levels at 111.50 and 111.00. The chances of JPY pairs rallying significantly during this month are now slim.

EURJPY
Dominant bias: Bearish
In the context of a downtrend, EURJPY went upwards on Monday and started coming down from the high of Tuesday. From there, price gradually dropped 300 pips to reach the demand zone at 125.00 on Friday. There is an ongoing bearish signal on this cross that may extend the move down by at least 200 pips this week - targeting the demand zones at 124.50 and 123.50. Only sudden weakness in the Yen will cause this cross to rally with any significance.

I’d like to conclude this forecast with the following quote:

“As you fully understand “your trading game” and know how the markets are functioning, you greatly increase your probability of success. Most of all, you will have “fun” trading — independent of winning or losing. If you do not enjoy yourself trading, then you are probably not trading the right systems – ones that fit you.” - Gabriel Grammatidis


Azeez Mustapha
Currency Analyst
Tallinex Limited
The Jaycees Building, Stoney Ground
PO Box 362, Kingstown, VC0100
St Vincent and the Grenadines
https://www.tallinex.com


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