Weekly Trading Forecasts for Major Pairs (December 7 - 11, 2015)
6 December 2015, 20:34
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Here’s the market outlook for this week: Content courtesy of Tallinex Limited (https://www.tallinex.com)
EURUSD
Dominant bias: BullishThursday saw an explosive bullish breakout - pushing price upwards by 450 pips to test the resistance line at 1.0950 before consolidating for the rest of last week. That breakout immediately overturned the recent bearish trend in the market …but a crucial question remains: was it a false breakout? A false breakout can easily be as significant as the one seen last week, but would be considered false if unable to sustain itself. So, for this bullish breakout to be valid, further bullish movement (fast or gradual) should be evident this week; otherwise, another leg of downward movement should begin. The general outlook for USD remains bright for December, while EUR is still expected to be weak.
USDCHF
Dominant bias: Bearish
There was a surprise pullback of 400 pips last Thursday, which broke below several resistance levels - even the great psychological level at 1.0000. This reinforced the gradual bearish movement that started at the beginning of last week and has left USDCHF facing challenges on two fronts: The recent strengthening of EUR, and the expected rally in CHF that is expected to start gaining strength by the end of this week and could last until Christmas Eve. This means bulls will have their work cut out to push price up in the short term.
GBPUSD
Dominant bias: Bearish
Price went up 250 pips on Thursday in a positively correlated move with EURUSD, and the distribution territory at 1.5150 was tested after price rose from the accumulation territory at 1.4900. Regardless, the bearish outlook on GBP pairs remains unchanged for December as the major bias on most GBP pairs has been bearish. The recent upward bounces should therefore be opportunities to go short at better prices.
USDJPY
Dominant bias: Neutral
Last week provided short-term upward and downward swings for this pair, but none succeeded in overturning the neutral bias on the market, so a move of at least 200 pips is required to get price out of this neutral zone. A move to the upside is most likely because the US dollar should be bullish, and because the Yen may suffer further loss of strength. The market condition is now currently great for scalpers and intraday traders.
EURJPY
Dominant bias: Bullish
As mentioned previously, one of the things able to bring about a vivid rally on this pair is a vivid rally on the Euro, and that is exactly what happened last week. From the demand zone at 130.00, price shot skywards - reaching the supply zone at 134.50 (a movement of 450 pips). Price has moved sideways since then, but further upward movement is still possible.
I’d like to conclude this forecast with the following quote:
“Although strategy is important, it is not as critical as knowledge and the discipline to apply and adhere to your rules. A trader who really knows the strengths and weaknesses of his or her strategy can do significantly better than someone who knows only a little about a superior strategy. Of course, the ideal situation would be to know a lot about a great strategy. That should be your ultimate goal.” - Mark Minervini
Azeez Mustapha
Currency Analyst
Tallinex Limited
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