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Market Outlook for week July 13th

Here’s the market outlook for this week:

EURUSD
Dominant bias: Bearish
This pair trended downwards in the first few days of last week, challenging the support line at 1.0950. From there, price shot upwards by 250 pips (based on expectation of a resolution to the Greek issue) and reached the resistance line at 1.1200. The rise is a threat to the existing bearish outlook as movement above the resistance line at 1.1250 will result in a Bullish Confirmation Pattern in the market. This week, weakness in the US Dollar may enable price to trend further upwards.

USDCHF
Dominant bias: Bullish
Though the bias on USDCHF is bullish, the bulls were unable to take price above the resistance level at 0.9500. That level was tested several times, but could not be broken – causing the market to experience some bearish correction. Price eventually closed below the resistance level at 0.9400 and further bearish correction this week could invalidate the extant bullish bias. Things will now be difficult for bulls because the US Dollar is expected to be weak this week, plus CHF may gain stamina by the end of this month.

GBPUSD
Dominant bias: Bearish
There is now trending movement on Cable, which fell 250 pips last week. Price tested the accumulation territory at 1.5350, and then rallied over 160 pips, closing above the accumulation territory at 1.5500. It is clear that a measure of volatility is now in this market, compared to its equilibrium phase a few weeks ago. This week, Cable may continue upward if bears fail to push price below the accumulation territory at 1.5450.

USDJPY
Dominant bias: Neutral
This pair was vacillating between the demand level at 122.00 and the supply level at 124.50, until it trended strongly last week… heading seriously south to test the demand level at 120.50 before rising over 230 pips and closing above the demand level at 122.50. The bias almost became bearish, but the subsequent rise in price neutralized that possibility. Further northward movement may be deceptive here, for there is still a strong chance of weakness in this pair before the end of the month. In fact, JPY could become very strong by the end of the month, which would send most JPY pairs tumbling.

EURJPY
Dominant bias: Bearish
Last week, EURJPY was unable to get below the demand zone at 133.50, despite commendable bearish efforts. Price went out of balance around that demand zone and rallied significantly (350 pips) to close around the supply zone at 137.00. This strong rally has put the recent bearish bias in jeopardy as additional upward movement of 100 – 150 pips will result in a confirmed bullish bias. As a result of the ongoing events in the Eurozone, this and other JPY pairs may well open with gaps this week, as is expected of EUR pairs.