Weekly Trading Forecasts for Major Pairs (October 19 - 23, 2015)

Here’s the market outlook for this week:

EURUSD
Dominant bias: Bullish
This pair initially moved upwards last week, but could not reach the resistance line at 1.1500 before correcting downwards. Price closed at 1.1348 on Friday, but the bias is still bullish (and will remain so unless the support line at 1.1250 is broken) - until then, any bearish attempts should be interpreted as an opportunity to go long at a better price.

USDCHF
Dominant bias: Bearish
While EURUSD continues to make visible bullish efforts, USDCHF will not display a meaningful rally. Price went south last week - testing the support level at 0.9500 many times, but failing to close below it. Friday saw price close below the resistance level at 0.9550, but there is a need to breach the support level at 0.9500 for the bearish trend to continue. Meanwhile, resistance levels at 0.9600 and 0.9650 should defend the current bearish bias.

GBPUSD
Dominant bias: Bullish
This pair went sideways on Monday, south on Tuesday, but rallied with strength on Wednesday… in conformity with the existing bullish outlook. Price headed into the distribution territory at 1.5500, but was unable to break above it. That distribution territory is now a challenge to bulls, who must overcome it for the current bullish outlook to remain sensible. Regardless, the expectation is currently for this pair to continue moving upwards.

USDJPY
Dominant bias: Neutral
USDJPY experienced a bearish breakout last week, and price dropped 200 pips as a result. This would have led to a Bearish Confirmation Pattern in the market, but the subsequent upwards bounce pushed price back into the recent neutral territory - running 150 pips upward just before the demand level at 118.00 could be tested. The requirement for ending the current neutral bias is this: Price must either close above the supply level at 121.00 or below the demand level at 118.00, and that condition can still be fulfilled this month.

EURJPY
Dominant bias: Bullish
This cross moved sideways from Monday until Wednesday (October 12 - 14), and then displayed a large pullback on Thursday - testing the demand zone at 135.00. Unless the demand zone at 134.50 is breached, the current bias will remain rational. It is therefore likely that EURJPY will go up this week or next, as most JPY pairs are likely to move upwards before the end of the month.

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

“Your best bet is to think like a four-year-old. When prices go up, I am bullish, and when they go down, I am bearish.” - Dennis Gartman

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