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Weekly Outlook for Week of Aug. 1-5th

Here’s the market outlook for this week:

EURUSD
Dominant bias: Bullish
A bullish journey ensued last week – going up 230 pips before topping out at 1.1195 and closing above the support line at 1.1150. There is now a bullish signal in this market, and the possibility of further upward movement. As mentioned in the previous article, major pairs (with the exception of GBPUSD) moved more strongly than they did from July 18 to 22. While USD remains weak, EURUSD will continue going up, and the Euro itself will rally against most major pairs during August – only meeting potential challenges against the Yen.

USDCHF
Dominant bias: Bearish
Contrary to expectation, price declined significantly because USD lost strength. Despite initially climbing over 90 pips to almost reach the resistance level at 0.9950, a setback occurred. From the high of 0.9949, price slid 300 pips and reached a weekly low of 0.9635. There is now a Bearish Confirmation Pattern in the market, so further decline is possible this week if USD remains weak.

GBPUSD
Dominant bias: Neutral
Another sideways week means the tight equilibrium phase remains valid, but a strong breakout of around 500 pips should occur this week or next. August should see GBP rally versus AUD and NZD, but may experience difficulties in doing so versus JPY (and possibly USD).

USDJPY
Dominant bias: Bearish
As anticipated, action turned bearish – dropping 450 pips last week. Bulls fought gallantly, but suffered ignominious defeat on Friday. Price is expected to reach the demand levels at 101.50, 101.00 and 100.50 this week, unless USD strength can oppose it. Selling pressure is also visible on other JPY pairs, and it is worth mentioning that the August outlook for JPY pairs is strongly bearish.

EURJPY
Dominant bias: Bearish
Like most other JPY pairs, price went south on Monday and Tuesday, but bulls halted the decline on Wednesday and Thursday. However, bearish pressure won on Friday as price fell 250 pips to close at 113.94. There is a clean bearish outlook for this market, so further decline is possible.

Source: tallinex.com