EUR/USD Weekly Outlook
EUR/USD resumed recent decline last week and dipped to 1.3384 before
forming a temporary low there and recovered. Initial bias is neutral
this week and some consolidations could be seen first. But upside of
recovery should be limited below 1.3936 resistance and bring another
fall. Below 1.3384 will target 61.8% projection of 1.4548 to 1.3498 from
1.3936 at 1.3287 and then 161.8% projection of 1.4939 to 1.3969 from
1.4548 at 1.2979, which is close to 1.3 psychological level.
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 started 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.
USD/JPY Weekly Outlook
Despite another dip to 76.11, USD/JPY is still contained above 75.94
low and stayed in range of 75.94/77.85. Thus, recent sideway
consolidation is still in progress. On the upside, while another
recovery cannot be ruled out, we'd expect strong resistance from near
term falling trend line (now at 78.04) to to limit upside. On the
downside, break of 75.94 low will confirm resumption of whole fall from
85.51 and would target 70 psychological level.
In the bigger picture, USD/JPY is still staying well inside the
falling channel that started back in 2007 at 124.13. There is no
indication of trend reversal yet even though medium term downside
momentum is diminishing with bullish convergence condition in weekly
MACD. Such down trend is still in favor to continue to 70 psychological
level. In any case, break of 80.23 resistance is first needed to
indicate completion of fall from 85.51. Secondly, break of 85.51 is
needed to be the first signal of medium term reversal. Otherwise, we'll
stay cautiously bearish in the pair.
In the long term picture, current decline suggests that the long term
down trend in USD/JPY is still in progress. Such down trend is expected
to extend further into uncharted territory with 70 psychological level
as next target. In any case, we'd at least need to see sustained break
of 85.51 before considering trend reversal.
GBP/USD Weekly Outlook
GBP/USD's fall accelerated to as low as 1.5327 last week and breached
1.5344 key support level before recovering mildly. A temporary low is
in place and intraday bias is neutral this week for some consolidations.
But recovery is expected to be limited by 1.5868 resistance and bring
fall resumption. Break of 1.5327 will target 161.8% projection of 1.6746
to 1.5780 from 1.6618 at 1.5055 next.
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
1.4229 resistance should be seen. Break of 1.4229 will bolster the down
trend resumption case and would possibly push GBP/USD through 1.3503
low. On the upside, break of 1.6618 resistance is needed to invalidate
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.
USD/CHF Weekly Outlook
USD/CHF jumped to as high as 0.9182 last week before making a
temporary top there and retreated mildly. Initial bias is neutral this
week for some consolidations first. But pull back should be contained by
0.8647 support and bring another rise. Above 0.9182 will target 161.8%
projection of 0.7065 to 0.8246 from 0.7710 at 0.9621. Nevertheless,
break of 0.8647 support will argue that a short term top is at least
form on bearish divergence condition in 4 hours MACD and would bring
deeper decline back to 0.7710/8246 support zone.
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.
USD/CAD Weekly Outlook
USD/CAD jumped sharply to as high as 1.0361 last week as the whole
rebound form 0.9406 resumed. With 1.0126 minor support intact, initial
bias remains on the upside this week and further rally could be seen
towards 161.8% projection of 0.9406 to 1.0009 from 0.9725 at 1.0701
next. On the downside, below 1.0216 minor support will turn bias neutral
and bring consolidations. But retreat should be contained well above
1.0026 resistance turned support and bring another rally.
In the bigger picture, sustained trading above 55 weeks EMA affirms
the case that whole down trend from 2009 high of 1.3063 has finished at
0.9406 on bullish convergence condition in weekly. Current rally from
0.9406 should now target 1.0851 resistance (38.2% retracement of 1.3063
to 0.9406 at 1.0803). Break there will extend the rebound to 61.8%
retracement 1.1666. On the downside, break of 0.9725 support is needed
to confirm completion of the rise from 0.9406. Or, we'll stay bullish in
the pair.
In the longer term picture, there is no clear indication that the
long term down trend from 2002 high of 1.6196 has reversed even though
bullish convergence condition was seen in monthly MACD. The fall from
1.3063 to 0.9406 looks corrective and could either be part of a sideway
pattern from 0.9056, or a corrective to rise from there. The long term
outlook, i.e., the possibility of taking out 1.3063 high, will depend on
whether rise from 0.9406 would eventually develop into a strong
impulsive wave. We'll wait and see.
EUR/JPY Weekly Outlook
EUR/JPY dropped to as low as 102.20 last week and met mentioned
medium term projection of 61.8% projection of 139.21 to 105.42 from
123.31 at 102.42 before forming a temporary low and recovers. Initial
bias is neutral this week for some consolidations. But recovery is
expected to be limited well below 106.98 resistance and bring another
fall. Below 102.20 should send EUR/JPY through 100 psychological level
to next near term target at 100% projection of 111.93 to 103.88 from
106.98 at 98.93
In the bigger picture, whole down trend from 2008 high of 169.96 is
still in progress and is building up downside momentum again. Sustained
trading below 100 psychological level should pave the way to 100%
projection of 139.21 to 105.42 from 123.31 at 89.52, which is close to
88.96 all time low. On the upside, break of 123.31 resistance is needed
to confirm trend reversal or we'll stay bearish.
In the long term picture, up trend from 88.96 (00 low) has completed
at 169.96 and made a long term top there. Based on the five wave
structure of the rise from 88.96 to 169.96, we're favoring that fall
from 169.96 is corrective in nature. Hence, look for reversal signal
ahead of 88.96 low.
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