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Market Outlook for Week of Aug. 3rd.

Here’s the market outlook for this week:

EURUSD
Dominant bias: Neutral
This pair experienced a great deal of volatility last week. Price went up on Monday, and then dropped seriously from Tuesday to Thursday. On Friday, price spiked upwards, but immediately corrected to the downside. The high volatility and short-term swings have cancelled any directional bias for this market as neither bulls nor bears are able to dominate – despite the fact that momentum is currently high. This pair should be characterized by high momentum this month, and protracted rallies will be difficult as long as USD remains strong.

USDCHF
Dominant bias: Bullish
Despite bearish attempts causing the support level at 0.9550 to be tested a few times last week, USDCHF was able to maintain its bullishness. Since 0.9550 has become a strong barrier to bearish efforts, it seems safe to assume that the current bullish outlook will remain valid as long as price stays above that support level. The resistance level at 0.9700 is also a big challenge to bulls as price could not break above it last week – despite sincere efforts. A break above that resistance level should result in a smooth continuation of the extant bullish trend, but the outlook will turn bearish as soon as the support level at 0.9550 is breached.

GBPUSD
Dominant bias: Neutral
Cable has not been able to go below the accumulation territory at 1.5450 or get above the distribution territory at 1.5650 for weeks, so these levels could serve as boundaries for short-term swing trades. However, a break in one direction or other is possible over the next two weeks and is likely to result in a serious directional movement. This month, GBP (and other GBP pairs) are most likely to be weak, though occasional bullish attempts should be expected.

USDJPY
Dominant bias: Neutral
This pair has been moving sideways since the middle of July. A break above the supply level at 124.50 could result in a Bullish Confirmation Pattern in the market while a break below the demand level 123.00 could result in a Bearish Confirmation Pattern. This month is likely to see the Yen gain significant strength – causing JPY pairs to tumble, and may start as early as this week, so it is possible that USDJPY will drop below the supply levels at 123.00 and 122.00 over the coming two weeks.

EURJPY
Dominant bias: Bullish
Although there is a measure of strength in EURJPY, the situation looks delicate. The supply zone at 137.50 could challenge further rallying, and the possibility of a bearish move is high because the outlook on JPY pairs for August is bearish.

Source: http://www.tallinex.com