Weekly Trading Forecasts for Major Pairs (February 8 - 12, 2016)
Here’s the market outlook for this week:: Content courtesy of Tallinex Limited (https://www.tallinex.com)
EURUSD
Dominant bias: Bullish
A smooth bullish run was the main feature last week – gaining some 420 pips prior to the bearish retracement on Friday (which could be taken as a sale in the context of an uptrend, because the uptrend may continue this week). Certainly, as long as price remains above the support line at 1.0950, the bullish bias cannot be threatened. The resistance lines at 1.1250 and 1.1300 are the potential targets for bulls this week.
USDCHF
Dominant bias: Bearish
Owing to perceived weakness in USD, USDCHF dropped 340 pips last week - ending the recent bullish outlook. The support level at 0.9900 was tried before the current (and shallow) upward bounce, and may well be retried or breached as price aims for the support levels at 0.9850 and 0.9800 this week. It should be noted that price is now below the psychological level of 1.0000; so it might be difficult for bulls to take the market above that level. If they succeed, it may signal the start of a rally able to threaten the bearish bias.
GBPUSD
Dominant bias: Bullish
From the low of January 29, Cable rose steeply to test the distribution territory at 1.4650 on February 4, but dropped 200 pips the following day. That correction proves the vulnerability of the ongoing strength in Sterling, because the outlook on GBP pairs remains bearish for this month. Although GBP is strong versus USD, it is weak against certain other currencies, such as GBPJPY, GBPCHF, EURGBP, etc. The rally might resume this week, but another bearish correction of 200 pips would put an end to the current bullish outlook.
USDJPY
Dominant bias: Bearish
The sudden and unexpected weakness was partly due to the weakness of USD. On January 29, price touched the supply level at 121.50, but dropped 500 pips in the following week - resulting in an undisputed Bearish Confirmation Pattern. Long trades are not currently logical before a clear indication that bulls have regained control.
EURJPY
Dominant bias: Bullish
Unlike other JPY pairs (e.g. NZDJPY, AUDJPY, etc.), EURJPY only came down by 160 pips due to strength in EUR itself - not enough to invalidate the bullish bias. Only a movement below the demand zone at 128.50 can achieve that, but that seems unlikely as a rally is expected this week or next (a possibility for all JPY pairs this month).
I’d like to conclude this forecast with the following quote:
“As I have matured as a trader I have become better at dealing with the emotions that come with trading. That has come simply from exposure, self-awareness and time.” - Rachel Shasha
Azeez Mustapha
Currency Analyst
Tallinex Limited
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