Weekly Forex Currency Pairs Outlook

EUR/GBP Weekly Outlook

After edging lower to 0.8529, EUR/GBP staged a strong rebound last week to as high as 0.8790 before losing some upside moment. With 4 hours MACD crossed below signal line, a temporary top should be formed at 0.8790 and initial bias is neutral this week for some sideway trading. A break of 0.8686 minor support will argue that recovery from 0.8529 is finished and will flip bias back to the downside for retesting this support. On the upside, above 0.8790 will bring another rise but in that case, we'll start to look for reversal signal as EUR/GBP approaches 0.8884 key near term resistance.

In the bigger picture, price actions from 0.9799 (2008) should be unfolding as a consolidation pattern in the long term up trend. The first leg is completed with three waves down to 0.8067. Second leg should also be finished at 0.9083. Fall fro 0.9083 is treated as the third leg and should now target 0.8067 first and possibly further to 61.8% projection of 0.9799 to 0.8067 from 0.9083 at 0.8013 (which is closes to 0.8 psychological level). Nevertheless, we'd expect strong support from 0.7693/8186 support zone to contain downside to finish off the consolidation. On the upside, break of 0.8884 resistance is needed to invalidate this view or we'll stay bearish now.

In the long term picture, long term up trend from 2000 low of 0.5680 shouldn't be over yet and the choppy fall from 2008 high of 0.9799 should be a correction only. We'd expect such correction to be contained by 0.7963/0.8186 support zone and bring up trend resumption. Rise from 0.5680 is still expected to extend beyond 0.9799 high eventually.

USD/CAD Weekly Outlook

Despite edging higher to 1.0026 last week, USD/CAD failed to sustain above parity and dropped sharply since then. The break of 0.9829 minor support dampened our bullish view. Initial bias remains on the downside this week for a test on 0.9725 support. Break there will suggest that whole rebound form 0.9406 is finished and deeper decline would then be seen to retest this low. On the upside, above 0.9860 minor resistance will turn bias neutral and bring recovery. But break of 1.0026 resistance is needed to confirm resumption of rise from 0.9406. Otherwise, we'll be near term neutral in USD/CAD.

In the bigger picture, a medium term bottom should be formed at 0.9406 on bullish convergence condition in weekly MACD. But subsequent rebound lacked follow through momentum so far and the pair struggled to sustained above 55 weeks EMA so far (now at 0.9906). Also, parity is having strong effect as a psychological resistance. Whole down trend from 1.3063 (2009 high) is possibly still in progress for another low below 0.9406. Though, even in that case, we'll look for reversal signal again ahead of 0.9056 key support level. On the upside, above 1.0026 resistance will revive the near term bullish case and should extend rebound from 0.9406 towards 1.0851 key resistance

In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.

AUD/USD Weekly Outlook

AUD/USD formed a temporary bottom at 1.0177 and recovered since then. Initial bias remains neutral this week for some consolidations. But after all, we're favoring the case the corrective rise from 0.9926 is already completed with three waves up to 1.0764. Hence, we'd expect current recovery to be limited by 1.0481 support turned resistance and bring another fall. Below 1.0177 will extend the decline from 1.0764 to retest 0.9926 low. Nevertheless, break of 1.0481 will dampen our bearish view and turn focus back to 1.0764 instead.

In the bigger picture, rise from 0.8066 has completed with bearish divergence in daily MACD at 1.1079. However, AUD/USD is staying well inside long term rising channel from 2008 low of 0.6008. Hence, there is no indication of trend reversal yet and the price actions from 1.1079 are viewed as a correction only. While deeper decline would be seen to long term channel support and possibly below, we'd expect strong support from 0.9404 resistance turned support to contained downside.

In the longer term picture, whole up trend from 0.4773 (01 low) extended to a point where it just missed 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084. While AUD/USD might be reversing in medium term, there is no signal of long term topping yet. We'd stay bullish as long as 0.9404 support holds and expect an eventual break of 1.1084 to 138.2% projection at 1.3023, which is close to 1.3 psychological level, in the long term.

USD/CHF Weekly Outlook

USD/CHF edged higher to 0.8927 but formed a temporary top there and turned sideway. Initial bias is neutral this week for more consolidation. Deeper retreat cannot be ruled out but downside is expected to be contained above 0.8246 resistance turned support and bring rally resumption. Above 0.8927 will extend the whole rebound from 0.7065 towards 0.9916 cluster resistance (61.8% retracement of 1.1730 to 0.7065 at 0.9948).

In the bigger picture, medium term down trend from 1.1730 is already completed at 1.7065. But there is no indication of long term reversal yet. Rebound from 0.7065 is treated as part of a medium term consolidation pattern. Such rebound would possibly extend to 0.9916/1.1730 resistance zone. But strong resistance should be seen there and bring reversal. On the downside, break of 0.7710 is needed to indicate completion of the rebound from 0.7065. Otherwise, we'll stay near term bullish in the pair for the moment.

In the longer term picture, long term down trend from 2000 high of 1.8305 is still in progress and there is no indication of a reversal yet. Such down trend would still extend to 100% projection of 1.8305 to 1.1288 from 1.3283 at 0.6266 after finishing the consolidation from 0.7065.

GBP/USD Weekly Outlook

GBP/USD dropped to 1.5706 last week but formed a short term bottom there and turned sideway. More consolidations would be seen in term and above 1.5868 minor resistance will bring stronger recovery. But in that case, upside should be limited by 1.6082 cluster resistance (50% retracement of 1.6454 to 1.5706 at 1.6080) and bring fall resumption. Below 1.5706 will extend the decline from 1.6618 to 100% projection of 1.6746 to 1.5780 from 1.6618 at 1.5652 and below.

In the bigger picture, rise from 1.4229, which is treated as the third leg of consolidation from 1.3503 (2008 low) should be finished at 1.6746 after GBP/USD completed a head and shoulder top reversal pattern (ls: 1.6298, h: 1.6746, rs: 1.6618). Fall from 1.6746 could be the fourth leg of the consolidation pattern from 1.3503 (2008 low) or resuming long term down trend from 2.1161 (2007 high). In either case, a test on 1.3503/4229 support zone should be seen. On the upside, break of 1.6618 resitsance is needed to invdalite this view. Or we'll now stay cautiously bearish in GBP/USD.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Another low below 1.3503 is anticipated after consolidation from 1.3503 is confirmed to be completed.

EUR/USD Weekly Outlook

After dipping to 1.3498, EUR/USD rebounded strongly to as high as 1.3936 last week. Such recovery might still extend but we'd continue to expect upside to be limited by 1.3972 resistance. Below 1.3703 minor support will flip bias back to the downside for retesting 1.3498 first. Break will confirm resumption of the whole fall from 1.4548 and should target 161.8% projection at 1.2979, which is close to 1.3 psychological level. However, sustained break of 1.3972 will likely bring stronger rebound towards 1.4548 key resistance.

In the bigger picture, current development indicates that medium term rise from 1.1875 has completed with three waves up to 1.4939 already. That also suggests that it's merely part of the consolidation pattern that start back in 2008 at 1.6039. Further decline would now be seen to 1.2873 support first and break will target 1.1875 and below. On the upside, above 1.4548, resistance is needed to confirm completion of the fall from 1.4939 or we'll stay bearish in EUR/USD.

In the long term picture, EUR/USD turned into a long term consolidation pattern since reaching 1.6039 in 2008. Such consolidation is still in progress and we'd expect range trading to continue for some time between 1.1639 and 1.6039.