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Market Outlook for week of Aug. 10th

Here’s the market outlook for this week:

Dominant bias: Bearish
EURUSD is now a volatile pair – characterized by serious struggles between bulls and bears in the context of a downtrend. The support line at 1.0850 was tested last week, but could not be broken. For the downtrend to continue, that must occur this week so that price targets the support lines at 1.0800 and 1.0750. This bearish outlook will remain valid unless the resistance line at 1.1050 is broken.

Dominant bias: Bullish
This is one of the few majors to trade in one direction throughout last week. From the support level at 0.9650, price moved upwards by 200 pips to close around the resistance level at 0.9850. The bias is bullish and the resistance levels at 0.9900 and 0.9950 could be tried this week, so this pair is expected to edge its way upwards provided the US Dollar does not experience any significant weakness.

Dominant bias: Bearish
GBPUSD broke south (out of the volatile equilibrium phase that was seen last week) and tested the accumulation territory at 1.5450 during the last two trading days. Price even dropped briefly below that accumulation territory before bouncing upwards. This week, further southward attempts are anticipated because the outlook for GBP pairs is bearish for this month.

Dominant bias: Bullish
This pair traded upwards last week – reaching the supply level at 125.00. However, further upwards movement was rejected at that level, making price correct downwards. Prior to the current price action, USDJPY moved sideways for a few weeks, and when it broke to the upside, the movement was only 100 pips. The bearish correction on Friday has made the bullish breakout appear false. Further bullish attempts are possible, but the most probable direction for this week is southward.

Dominant bias: Neutral
EURJPY showed no clear victory between bulls and bears, Last week’s desperate bullish attempts were frustrated at the 136.50 supply zone. This shows that bears are fighting hard. A test of the demand zone at 135.00 will result in a Bearish Confirmation Pattern – signaling more bearish movement. The Yen is expected to be strong this month, which should cause most JPY pairs to become quite bearish.