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Market Outlook for week of August 17th

Here’s the market outlook for this week:

Dominant bias: Bullish
This pair rose by 250 pips last week – from the support line at 1.0950 to the resistance line at 1.1200, before falling back to close the week at 1.1110. Price really met a challenge at the 1.1200 resistance line, but needs to go above that for any bullish journey to continue unhindered. There are support lines at 1.1050 and 1.1000, so a bullish outlook makes sense as long as those levels are not breached.

Dominant bias: Bullish
Recently, both USDCHF and EURUSD have been making bullish efforts. This is unusual because these pairs should mirror each other (and soon will). After testing the resistance level at 0.9900, USDCHF corrected by 200 pips to test the support level at 0.9700. However, this has not rendered the recent bullish bias invalid, as that requires the support level 0.9650 to be breached. This pair is now making an effort to go back up, and this week should see the result of that effort.

Dominant bias: Neutral
Cable remains highly volatile – characterized by large upswings and downswings. There is no clear directional bias for this pair because bulls and bears enjoy only transitory victories. There is an accumulation territory at 1.5450, and a particularly adamant distribution territory at 1.5650 that has rejected all bullish efforts for the past several weeks. Since the expectation for GBP is bearish for this month, things should become really bearish if price breaks through the accumulation territory at 1.5450. However, a break above the distribution territory at 1.5650 will mean the bearish expectation for this month may not materialize.

Dominant bias: Neutral
Based on current price action, it could be said that USDJPY has managed to defy gravity, as occasional bearish corrections are quickly followed by rallying attempts. It will be intriguing to watch what happens this week – movement below the demand level at 123.50 will result in a ‘sell’ signal, while movement above the supply level at 125.50 will result in a Bullish Confirmation Pattern.

Dominant bias: Bullish
This cross rallied massively last week – closing at 138.11 on Friday, August 14 (just above the demand zone at 138.00). Although price may go up even more this week, that will not rule out the possibility of a bearish plunge. Overall, the upward trend will only continue as long as EUR is stronger than JPY.