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Market Outlook for week of August 24th

Here’s the market outlook for this week:

Dominant bias: Bullish
>From the support line at 1.1050, this pair went up by 330 pips – going above the support line at 1.1350. EUR is now one of the strongest of the majors (as is CHF), and this has reflected on most EUR pairs. The next targets for EURUSD are the resistance lines at 1.1400 and 1.1450, which could easily be breached with ongoing bullish pressure in the market.

Dominant bias: Bearish
This is a bear market. The massive bearish breakout seen last week has resulted in an end to the recent sideways movement. USD weakness and CHF strength, coupled with the fact that this pair has to trade in the opposite direction to the strong EURUSD, have contributed to the current tailspin. Price dived 300 pips last week, and is now close to the support level at 0.9450. With a continuation of the current situation, bears may be able to attain the next support level (0.9300) this week.

Dominant bias: Bullish
GBP may be weak elsewhere (as seen with GBPCHF and GBPJPY), but it is not weak against USD. Last week, GBPUSD managed to get above the stubborn accumulation territory at 1.5650. Bulls tried to push price higher, but bears came in against them and started fighting back. Another serious fight is taking place around the accumulation territory at 1.5700, but the bulls need to win for the current bullish outlook to remain logical. The hope of a weak GBPUSD has been dashed for this month because stubborn distribution territories, if breached, become stubborn accumulation territories (and vice versa) and, after all, GBPUSD is positively correlated with EURUSD.

Dominant bias: Bearish
Following the recent equilibrium phase (which lasted for several weeks), USDJPY finally broke south in a predictable manner. A weak USDJPY has long been anticipated; and considering that bulls have failed to push price significantly northward, the current bearish plunge is no surprise. In a strong-trending market like this, demand (and supply) levels will be easily broken. Further southerly movement is anticipated this week, though bulls may make some faint efforts to reverse the trend.

Dominant bias: Bullish
EURJPY initially went down 100 pips last week, but the movement was later reversed and price went rapidly upwards. The next point of attack is the supply zone at 139.00. Price is very close to that supply level, so it may be breached. The bullish bias will exist for as long as EUR is strong.