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Market Outlook for Week of Oct. 5th

Here’s the market outlook for this week:

EURUSD
Dominant bias: Bearish
EURUSD showed no strong directional movement, but was volatile for most of last week. The bias is bearish, so even the bullish breakout that occurred on Friday could prove to be false unless the resistance lines at 1.1350 and 1.1400 are overcome. Looking to the downside, there are strong support lines at 1.1150 and 1.1100 to be reckoned with, despite the fact that selling pressure is likely – due to anticipated USD strength.

USDCHF
Dominant bias: Bullish
In spite of the large pullback on October 2, this pair will remain a bull market until price can breach the 0.9600 and 0.9550 support levels, and remain below them. This will not be an easy task for bears as the outlook for USD is bright this month. The main potential challenge to the bullish bias is the expected strength in CHF itself, which should be quite visible on certain CHF pairs during the last two weeks of this month. That aside, a significant EURUSD rally is needed before USDCHF can go too far south, so the outlook remains bullish and that last pullback may simply be another good opportunity to join the uptrend.

GBPUSD
Dominant bias: Bearish
The rally last Friday was not strong enough to jeopardize the existing bearish trend, and there is still a Bearish Confirmation Pattern in the market which suggests price could continue lower. Since the October outlook for USD is bright, price will find it somewhat difficult to make any serious upward moves; however, large movements should be expected this month.

USDJPY
Dominant bias: Neutral
This pair is still directionless, and the market is choppy, so it would be prudent to stay away until a direction presents itself. For this pair to enter trending mode, price must either close above the 121.50 supply level or below the 118.00 demand level. Until then, this market will remain choppy and trendless. Fortunately, the present consolidation should end during this month.

EURJPY
Dominant bias: Bearish
Movement was somewhat flat last week – all in the context of a downtrend, but this and other JPY pairs should exhibit strong trending movements this month – perhaps as early as this week for some JPY pairs (including this one). The expectation for this pair is an up-move of around 200 pips this week, which would result in a new bullish outlook if it occurs. A major factor in the direction for this week is the condition of the Yen, which could weaken.

 

Source: http://www.tallinex.com