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Weekly Outlook for Week of July 18-22nd

Here’s the market outlook for this week:

Dominant bias: Neutral
This market was flat throughout last week – staying between the resistance line at 1.1150 and the support line at 1.1000. Price did move lower on July 15, but it is unlikely that the support line at 1.1000 will be breached or closed below, even after testing it. This week, the probability of price going north is higher than the probability of it going south, so the resistance lines at 1.1200 and 1.1250 could be tested by Friday.

Dominant bias: Bullish
In spite of bearish attacks, a significant decline was avoided last week. Price managed to get above the resistance level at 0.9850, but could not reach the subsequent resistance level at 0.9900 (which is a strong barrier to the bullish movement). Price underwent a shallow bearish correction on Wednesday and Thursday, though the bias remains bullish. There should be further bullish movement this week, but there are two threats to the outlook: 1). CHF could become strong any time this month. 2). USD may weaken before the end of this week. Until one of these things materializes, the uptrend will continue.

Dominant bias: Bearish
As forecast, a conspicuous effort to rally occurred last week, but without overturning the bearish outlook. Other GBP pairs also rallied significantly, like GBPNZD (1100 pips) and GBPJPY (1300 pips). Price moved north by 550 pips, then topped at 1.3480 before the current pullback began. A bullish signal has been generated in the hourly and 4-hour charts, whereas the overall bias remains bearish on higher timeframes. Price might be able to go further upwards this week, and the bias could turn bullish if the rally is quite strong.

Dominant bias: Bullish
Contrary to expectation, price rose significantly last week (as with other JPY pairs) – a move of 550 pips which rammed into the supply level at 106.00 before correcting on Friday. There is a now a Bullish Confirmation Pattern in the chart, which means that further upwards movement is possible. The only potential impediment to the current bullish outlook is a possible weakness in USD, which might result in considerable selling pressure.

Dominant bias: Bullish
This pair gained more than 700 pips last week which created a Bullish Confirmation Pattern in the 4-hour chart. Although price corrected by over 200 pips on Friday, the Bullish Confirmation Pattern remains valid. That means price could go further upwards this week and, though threats from bears have not abated, only a move below the demand zone at 114.00 will render the bullish outlook invalid.