EUR/USD Weekly Outlook
EUR/USD's rebound from 1.3145 short term bottom extended further to
as high as 1.3893 last week and closed strongly. Initial bias remains on
the upside this week and current rise should target 61.8% retracement
of 1.4548 to 1.3145 at 1.4012, which is close to 1.4 psychological
level. On the downside, break of 1.3685 minor support will indicate that
such rebound has likely finished and should flip bias back to the
downside for retesting 1.3145 low.
In the bigger picture, as this point, we're still favoring the case
that whole rise from 2010 low of 1.1875 has completed at 1.4939. Fall
from 1.4939 is viewed as resuming the whole corrective fall from 2007
high of 1.6039 ad should eventually take out 1.1875 support. However,
the stronger than expected rebound from 1.3145 reduced our confidence on
this scenario. Sustained trading back above 1.4 psychological level
will argue that fall from 1.4939 is finished and the corrective nature
in turns indicate that rise from 1.1875 is not over.
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
Much volatility was seen in USD/JPY last week but the pair's rally
attempt was limited at 77.48. Also, there is no follow through buying to
help USD/JPY sustain above near term falling trend line yet. More
choppy sideway trading could be seen between 76.11 and 77.48 initially
this week. But we'll remain slightly bearish in USD/JPY as long as 77.48
resistance holds and favor an eventual downside break out through 75.94
support. Nevertheless, sustained break of 77.48 will argue that whole
decline from 85.51 is possibly over and further rise would be seen back
towards 80.23 resistance.
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 rebound from 1.5271 short term bottom extended further to
as high as 1.5817 last week and closed strongly. Initial bias remains on
the upside this week and current rally should continue towards 61.8%
retracement of 1.6618 to 1.5271 at 1.6103. On the downside, below
1.5666 minor support, though, will indicate that such rebound is likely
finished and should flip bias back to the downside for retesting 1.5271
low first.
In the bigger picture, price actions from 1.3503 are treated as
consolidations to long term down trend from 2.1161 and should be near to
an end, if not finished at 1.6476. Near term outlook is quite mixed as
the nature of the rebound from 1.5271 has many possibilities of roughly
equal chance. But in any case, upside should be limited below 1.6618
resistance. Eventually, we'd expect a break of 1.4229 support to signal
resumption of the down trend from 2.1161 and that should send GBP/USD
through 1.3503 (2008 low).
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's fall last week confirmed short term topping at 0.9315.
Initial bias remain son the downside this week and the pull back from
0.9315 should extend to 0.8647 and below. Though, we're expecting strong
support above 0.8246 (50% retracement of 0.7065 to 0.9315 at 0.8190) to
contain downside and bring resumption of rebound from 0.7065. On the
upside, above 0.9039 minor resistance will argue that such pull back is
finished and flip bias back to the upside for retesting 0.9315 first.
In the bigger picture, medium term down trend from 1.1730 is already
completed at 0.7065. 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 0.8246 resistance
turned support will indicate that rebound from 0.7065 is finished and
should turn outlook bearish for a retest on this low.
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.
AUD/USD Weekly Outlook
AUD/USD rebounded further to as high as 1.0345 last week and closed
strongly. Initial bias remains on the upside this week for near term
falling channel resistance (now at 1.0389) first. Break there should
pave the way to 1.0764 resistance and above. On the downside, below
1.0104 minor support will turn bias neutral and bring consolidations.
But another rise will remain in favor as long as 0.9865 support holds.
In the bigger picture, AUD/USD drew strong support from 0.9404
despite a brief breach and the development retained bullish outlook in
the long term. Whole up trend from 2008 low of 0.6008 is still in
progress and price actions from 1.1079 should merely be a consolidation
pattern. Having said that, though, we'd be cautious on reverse signal as
AUD/USD enters into 1.0764/1079 resistance zone and there would be
another near term decline before consolidation from 1.1079 finishes. But
in any case, we'll stay bullish as long as 0.9387 support holds and
favor an eventual upside break out.
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/CAD Weekly Outlook
USD/CAD's fall from 1.0656 short term bottom extended further to as
low as 1.0096 last week. Initial bias remains on the downside this week
for 50% retracement of 0.9406 to 1.0656 at 1.0031. But we're expect
strong support from there, which is close to 1.0009 support, parity and
55 days EMA (now at 1.0039) to contain downside and bring rebound. Above
1.0272 minor resistance will suggest that pullback from 1.0656 is
finished and flip bias back to the upside for retesting this high.
In the bigger picture, that down trend from 2009 high of 1.3063 has
finished at 0.9406 on bullish convergence condition in weekly MACD. Rise
from 0.9406 should at least be part of a long term consolidation
pattern from 2007 low of 0.9056 and should extend through 1.0851
resistance (38.2% retracement of 1.3063 to 0.9406 at 1.0803), possibly
to 61.8% retracement 1.1666 and above. However, break of 1.0009 support
will dampen this view and firstly, suggest that rebound from 0.9406 is
finished. Secondly, such development will also argue that price actions
from 0.9406 are merely consolidating the down trend from 1.3063. In such
case, focus will be turned back to 0.9406 low in near term.
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/GBP Weekly Outlook
EUR/GBP rose further to 0.8786 last week but lost momentum ahead of
0.8795 resistance. Initial bias remains neutral this week and some
sideway trading could be seen first. Note that while another rise cannot
be ruled out, we'd maintain that outlook will remain bearish as long as
0.8795 resistance holds and the whole decline from 0.9083 is still in
favor to continue lower. Below 0.8687 minor support will flip bias back
to the downside for retesting 0.8529 first. Nevertheless, break of
0.8795 will dampen the bearish view and turn focus back to 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 from 0.9083 is treated as the
third leg and should 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
