Here’s the market outlook for this week: EURUSD Dominant bias: Bearish This is a bear market which continued its bearish trend last week and is expected to continue this week as well, although the possibilities of transitory rallies cannot be ruled out. The support line at 1.2500 has been tested and it will surely be tested again as bears apply more effort into push price downward. Should they succeed, the next targets are the support lines at 1.2450 and 1.2400. USDCHF Dominant bias: Bullish This is a bull market which pushed further north last week and should also continue this week, despite occasional market corrections. The resistance level at 0.9650 was tested last week, and may be tested again. A breach would target the support level at 0.9750. Occasional corrections would also be challenged by the support levels at 0.9550 and 0.9500. GBPUSD Dominant bias: Bearish GBP, which is currently strong versus some other currencies, is weak compared to USD. This is because USD has become one of the strongest currencies of the majors. That aside, GBPUSD is usually positively correlated with EURUSD, so would be expected to follow the current downward path of EURUSD regardless. From the distribution territory at 1.6150, price dived towards the accumulation territory at 1.5950 - testing it a few times. Additional strength in USD makes a breach of the current accumulation territory highly likely and making the next accumulation territory at 1.5850 a probable target. USDJPY Dominant bias: Bullish Since USD is very strong and JPY is very weak, it was surprise that USDJPY moved upwards by over 450 pips last week. The trend should continue as long as USD is strong versus JPY - allowing bulls to target the supply level at 113.50. The demand levels at 111.50 and 111.00 should act as challenges to southward corrections along the way. EURJPY Dominant bias: Bullish The Euro is not particularly strong – weakness in the Yen is the reason for this cross rising. The gain has been significant enough to generate a very formidable Bullish Confirmation Pattern in the market. On Friday, October 31, 2014, price closed above the demand zone at 140.50. With additional weakness in the Yen and the further exertion of buying pressure, this pair could reach the supply zone at 141.50 this week
Posted on: Mon, 03 Nov 2014 11:29:26 +0000
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