Here’s the market outlook for this week: EURUSD Dominant bias: Bearish The Euro is now one of the weakest of the popular currencies, having dropped by roughly 900 pips since the beginning of this year. The support line at 1.1150 has already been tested and will be tested again (with the potential to be breached), as it is supported by a vivid Bearish Confirmation Pattern in the market. The outlook for this week is bearish – continuous selling pressure is expected and there is a strong possibility that the Euro could reach parity with the US Dollar. USDCHF Dominant bias: Bearish The bias on USDCHF remains unchanged. On Friday, January 23, 2015, price closed at 0.8784. As EURUSD is weak, USDCHF ought to be strong, and that strength will continue to build gradually in the context of a bearish outlook. Price should continue to move slowly and steadily upwards this week. GBPUSD Dominant bias: Bearish One nice thing about Cable is that it has now resumed a clean, positive correlation with EURUSD - an established habit. Cable and EURUSD are both dropping, but the drop in the latter is more significant. For Cable, a further drop is expected this week, which may be more serious than the drop last week. USDJPY Dominant bias: Bearish When compared to EURJPY, this pair did not move so much recently. Upswings are alternated by downswings, though the bears are able to make their presence felt. Price may be able to reach the demand level at 116.50, but there is the possibility that the bulls will end up dominating the market before the end of this week. EURJPY Dominant bias: Bearish This pair made some effort to rally last week. From the beginning of the week, price went upwards by 200 pips, reaching the supply zone at 137.50. However, further upwards movement was rejected at that supply zone, and price dropped steeply - reaching the demand zone at 131.00. There is a negligible upward bounce in the market, which means almost nothing when compared to the overall bias. Overall, this pair has dropped over 1300 pips since the beginning of this year. Price may test the demand zones at 131.00 and 130.00, but will only go further south in the face of continued weakness in the Euro, as there is the possibility that the Yen will become weaker before the end of this month.
Posted on: Mon, 26 Jan 2015 00:52:02 +0000