Weekly Trading Forecasts for Major Pairs (February 1 - 5, 2016)
31 January 2016, 20:40
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Here’s the market outlook for this week:: Content courtesy of Tallinex Limited (https://www.tallinex.com)
EURUSD
Dominant bias: NeutralPrice went up from the support line at 1.0800 and reached the resistance line at 1.0950. From that resistance line, price dropped 120 pips. There is a neutral bias on this pair that will remain in force until price goes below the support line at 1.0800 or above the resistance line at 1.0950. That 1.0950 level has been a strong barrier for a few weeks, so it is more likely that price will break below the support line at 1.0800 due to a bearish outlook on EUR pairs for this week (and for most of February).
USDCHF
Dominant bias: Bullish
Price moved sideways in the context of an uptrend from Monday to Thursday, but broke upwards on Friday - reinforcing the existing trend. The resistance level at 1.0250 has already been tried, and there is a strong possibility that price will get above that resistance level - targeting the resistance levels at 1.0300 and 1.0350. This will be made easier in the wake of a weaker EURUSD.
GBPUSD
Dominant bias: Bearish
As previously mentioned, long signals for this pair will probably be traps until the bearish bias is confirmed as being over. Bulls made commendable efforts to effect a rally last week - all of which proved futile following the 200-pip pull-back on Friday. The outlook for GBP (all GBP pairs) is bearish for February - possibly even beyond then. Bullish signals should be ignored because GBP will face challenges on many fronts - including the strengthening of AUD and NZD in this month.
USDJPY
Dominant bias: Bullish
Price moved in a tight range between Monday and Thursday, before a significant bullish breakout early on Friday pushed price upwards by 300 pips to test the supply level at 121.50. There were also strong bullish breakouts on other JPY pairs - signaling the beginning of protracted bullish movements on those pairs. Bullish movements on JPY pairs were expected around the end of January, so traders are advised to shun bearish signals on JPY pairs during February because the outlook for all JPY pairs is bullish for the month.
EURJPY
Dominant bias: Bullish
This cross had already started moving upwards before the massive bullish breakout on Friday. In total, price went up 400 pips last week - reaching the supply zone at 132.00, and could go up at least another 200 pips this week. Considering the current bullish outlook for JPY pairs, pullbacks should be seen as opportunities to go long. Even weak currencies like EUR and GBP will be seen going up against JPY during February.
I’d like to conclude this forecast with the following quote:
“One major aspect of Forex I really value is that trends are easy to find. Trading a trending chart has a big edge for two main reasons. First, trends generate good follow-through. In many instances they go much further than anyone might have expected.” - Gabriel Grammatidis
Azeez Mustapha
Currency Analyst
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