khansalarehsan

A review of FX market for the week commencing 19 AUG

TVC:DXY   U.S. Dollar Currency Index
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Dear Friends

Here is what I think for the coming week, Have a great trading week.

EUR

EURUSD
Last week, I mentioned there would be a great Shorting opportunity for this pair and finally it collapsed. For the coming week I do not see any support on any TF except on the Daily Chart . I would not go Short immediately at Open as we should see this support on Daily to be taken away first.
Action: Wait for any buying failure on hourly chart to sell it back again

EURCAD
Last week, I highlighted that there is a strong selling opportunity for this pair. For the coming week also I think this is the best EUR pair for Shoring. Watch the beautiful Wedge breakout on 4h chart. On the way going down watch falling trend lines on 1h and 15m charts as supports if you have an account with high leverage but the overall trend is bearish . Finally just watch AUG candle on Monthly TF and imagine if it closes as a bearish engulfing after visiting a rising trend line .
Action: STRONG SELL

EURCHF
Similarly for this pair I mentioned that there is a great Shorting opportunity for this pair. On 4h chart watch the false break of the highs. I see a great short opportunity in the coming week for this pair. Watch supports on 1h and 15m TF.
Action: SELL
EURAUD
Last week I did not have any update for this pair but two weeks ago I mentioned this is a good pair to go Long if EURO became stronger which was not the case. On daily TF it has a hard job to break EMA 14 and 21 to go lower but on 4h already broke the rising trend line and is bearish . I would not trade this pair until I see further evidence. But based on weighted averages I am bearish on EURO and Bullish on AUD, therefore it is more likely to see this pair falling than rising.
Action: Watch for further evidence
EURNZD
Both NZD and EUR are weak and this pair does not offer a clear direction. I would not trade this pair.
Action: Watch for further evidence
EURJPY
This pair has the potential for an explosive move lower. AUG Monthly candle is breaking a very old wedge formation on Monthly TF. I would not trade this pair based on breakout of 1h and 15m charts as the key support is holding on 4hr and Daily TFs.
Action: Wait for the breakout of 4h and Daily to go Short
EURGBP
Looking at Weekly TF this pair has an interesting set up. Two weeks ago it broke an old resistance and last week just visited the breakout area again. This is a perfect set up to go Long IF it makes a fresh new high again. A risky trade is to trade any breakout of Shorter TF charts (15m and 1h) to go Long but it would be better to see a bounce off the EMA 14 and 21 on Daily for a safer Long trade.
Action: Watch for any bullish evidence on a shorter TF to go Long
Overall EURO is very likely to fall in the coming week.
Now let’s review EURO weighted average:
On monthly TF it is a classic rotation between support and resistance . Also just imagine what if we have a bearish engulfing of AUG after failing to pass EMAs!



On weekly you can see the downtrend and even if EURO is going to go higher it needs to have one more failed attempt to visit the pitchfork median. Therefore it is more likely to visit the median first then breaking the resistance.


On Daily you can see the last week EURO made two failed attempt to go higher. See the size of the wicks. Then broke EMAs and currently visiting the median. Below the median I see and 1.3% drop for all EURO pairs. As you can see there is nothing to stop it. Probably this is in line with what I mentioned for EURUSD and if EURUSD support taken away on Daily TF then I expect all EURO crosses to drop .



On 4h TF see the beautiful rejection off the pitchfork median AND EMAs and see the rising trend line above it as a likely resistance. Nothing below this as a support for almost 1.18% on average.



On Hourly TF see how EURO has been unable twice to visit the median. There is a price to pay whenever a market makes an undershoot and that has to be paid by an overshoot on the other side.



Use the support (falling trend line ) to reenter or adding to Shorts if it breaks and acted as a resistance.
On Monday I will watch this 15m chart to see how it behave after visiting the median. I would sell any failure from there…




Finally watch the correlation between German Yields and Euro weighted average. You can see German Yields has been falling and but not Euro . Soon we shall see Euro supports will be broken and follow yields.



Similarly watch France Yields. It is falling and Euro is still trading above the support …



Yields and currencies are positively correlated.


AUD

AUDUSD
This pair is bearish on very long TF and on Daily it has been trading below the resistance for almost 2 weeks. It looks like a bearish flag but on 4h TF it is above the EMA 14 and 21. The fact that for almost 2 weeks it is consolidating makes me thinking that an upside breakout is also possible. After a long time this pair has been trading above the EMA 14 and 21 on 4h TF. I think any price action on 1h and 15 is not important as we should see a clear break lower of EMAs on 4h TF. Overall it is more likely to see a break lower as longer term charts suggest but 4h chart is a real worry.
Action: Watch 4h chart for further evidence
AUDCAD
Last week this pair highlighted with a Shorting opportunity but that did not occurred. Looking at Daily chart , like AUDUSD , it is trading below the resistance and EMA 14 and 21. But as it did not go lower last week, it built a support as a rising trend line on 4h and 1h TF. Hence we must see a break of these rising trend lines before Shorting this pair. Again 4h chart is the main chart to watch in the coming week. Going lower is easier but if it broke the resistance things will be totally changed.
Action: watch 4h TF for a break of the most recent rising trend line to go Short
AUDCHF
Like other AUD crosses this is a bearish pair but the main concern is that on 4h TF it is trading above the EMA 14 and 21 and it is penetrating the resistance. I like this pair for Shorting but to trade it I would like to see the price to come below the EMAs 14 and 21 on 4h TF and then using a good bearish sign on 1h and 15 I will open a short position. If it break the resistance, things become more complicated as it has to break the EMAs on daily too to become a Bull market.
Action: Watch 4h TF for further evidence.
AUDNZD
Last week I highlighted this pair with a great bullish opportunity. It made a nice bullish move and for the coming week I expect the bullish trend to continue. Looking at the monthly TF it made 3 attempts to go lower counting AUG as one of these attempts. On Weekly for the first time since 10 AUG 2018 it broke the falling trend line and closed outside it. On Daily it broke April resistance (falling trend line ) and bounced off the EMAs and made a fresh high. The only concern is that the break to the upside does not have the follow through yet. I would go to the weighted average AUD and watch 4h TF for a fresh break to the topside to open a new position
Action: watch AUD weighted average on 4h TF for a break to the top side to open a Long trade
AUDJPY
This pair is sitting right on the support on the Monthly TF. Unlike AUDUSD and AUDCAD on Daily TF it was trading above the support for most of the week. On 4h like other AUD crosses it is trading above the EMA 14 and 21 and very close to the resistance. In fact on both 4h and 1h TFs it has been forming a wedge formation and break is likely to happen soon. This pair does not really offer a good trading opportunity.
Action: Watch for further evidence

Now let’s review Weighted average Chart. First see the correlation between Weighted average AUD and AUD 10 years Yields. Nicely correlated. Remember how this correlation was lost for EURO .



On Monthly TF, AUD is very bearish



But see how on Weekly TF it has reached a major support



I would not go Short here, probably it visits EMAs first to get more momentum to break the support.

On Daily it is also reached the support



Similarly on 4h TF



and even on Hourly it seem it broke the median and now it is trading above it



Overall although AUD is bearish Long term but it seems it has reached some levels of Support and it is likely that it goes to a correction phase for sometime …



NZD


NZDUSD
This pair is bearish on any TF. Last week this pair was highlighted with a good Shorting opportunity and it made a bearish move. For the coming week I will remain bearish on this pair. The only concern is that on 4h TF has been moving sideway for an extensive period of time and RSI is rising. I would like to see a clear break of the lows to open a short trade on this pair.
Action: SELL it if breaks the consolidation area on 4h TF.
NZDCHF
Last week I was bearish on NZDCHF and for the coming week I will remain bearish on this pair. It is bearish on any TF and unlike AUDCHF it broke the most recent rising trend lines on 1h and 15m TFs. The main concern for Shorting this pair is 4h chart. It is now trading above the EMAs and RSI is rising. To go Short I would like to see 4h chart breaks the consolidation area and go lower. A risky trade is to trade the current breakout on 1h TF and go Short.
Action: SELL
NZDCAD
Last week this pair was highlighted with a bearish opportunity and it made a move lower. I will remain bearish on this pair as it is ready to fall on any TF. On Daily it nearly visited EMAs on THU and pulled back below the major resistance on FRI . Any fresh low on this pair will take it a lot lower. On 4h it formed a wedge formation and the last candle broke the lower band of the formation. Last week this was the most bearish NZD pair alongside GBPNZD . However on hourly TF it has just reached a support. I would wait for this support to breaks first and then I will sell the fresh low.
Action: Watch hourly chart for a break lower to go Short
NZDJPY
Last week I did not have any update for this pair. For the coming week also I am not quite sure about this pair. On very long TF it is very bearish but on 4h TF it seems it is going to break the resistance.
Action: Watch for further evidence

Now let’s review NZD Weighted average
On the Monthly TF this pair has been forming a beautiful wedge formation and currently in AUG the lower band of this formation is breaking. The fact that it could not rotate again and visit the upper band of the formation would add to the bearish power. I would expect the price at least to visit the pitchfork median before taking any further action. This is in line with the current RBNZ rate cut by 0.5%.



On the weekly just watch where we are now. Very close to break the lower band of the pitchfork . That is why we have consolidations across all NZD crosses as it needs to build up power in order to break this support.



if it bounces here then the path is open for another round of rotation to visit the upper band of the wedge formation.



Although on Monthly TF, NZD is about break the wedge formation but see how on a shorter TF, like Daily this pair is heading into bunch of supports.



If it give a Daily candle closing below the median, then it will be very bearish .
On 4h TF, there is no support for sometime



on hourly I would watch this wedge formation to break first before placing any order on NZD crosses




GBP

Sterling cross will be challenging in the coming week. It is not bullish and it is not ready to fall.
GBPUSD
On weekly TF this pair has reached support last week and bounced perfectly. But on monthly it is still bearish . Looking at a daily TF it has a hard job to do going higher with a bunch of resistance and EMAs on its way and going lower is hard too with an RSI of around 30 and the price being traded above the EMAs on 4h TF as well as above the supports. I think going lower is easier and this is what UK Gilts and UK Yields suggest but we must see some sort of false break higher to sell this back lower. Near term is bullish . Looking at the major swings on 4h TF it is still making a lower low and lower high. Would be great to see price going above the most recent swing high and reverse.
Action: Watch for further evidence
GBPCHF
Similar situation for this pair. I would go short on this pair as in near term it is bullish and I would not go Long on this pair as on a longer TF it is bearish . Perhaps the key point is that on hourly it has reached a bunch of supports.
Action: Watch for further evidence
GBPCAD
This pair alongside GBPJPY have reached old supports on Monthly TFs but again hard to go Long as it is still trading below EMAs 14 and 21 on Daily TF. On 4h it broke the falling trend line and currently visiting the support. To go Long I would like to see a break of the EMAs followed by a visit to the EMAs again and I would by the bounce from there.
Action: Watch for further evidence
GBPJPY
Again this is another Sterling cross that does not have a clear vision. On 4h I like the break of the resistance and made a beautiful bounce off the EMAs and resistance but it is still below the EMAs on Daily.
Action: Watch for further evidence.
GBPAUD
This pair is consolidating on Daily and 4h TF. Two weeks ago it made a beautiful Shooting Star on Weekly TF but since there has not been a follow through. The structure is still valid.
Action: Watch for further evidence
GBPNZD
GBPNZD is the only pair that I like it to go Short. On Weekly TF it beautifully bounced off the support 3 weeks ago and since then it respected the support. Unlike all other Sterling crosses on Daily TF it is trading above the EMAs and on FRI it made a nice bounce off them. Same on 4h, it is above the EMAs and it has enough room to go higher with no resistance in near term. This pair is a battle between two weak currencies and considering the GBP made a serious of losing sessions and NZD weighted average is just breaking the wedge formation on Monthly Weighted Average, I would expect this pair to rise in the coming session. The major concern is the EMAs on Weekly TF. A break above this make this pair very bullish .
Action: Look for a good spot on a 1h and 15 TF to go Long.

Now let’s review the weighted average GBP.
On Monthly it is trading inside a wedge formation. First target is the middle band and the second target is the lower band of the wedge formation.



On Weekly see how it respected the falling trend line as a support and bounced last week. The correction move may continue to the EMAs.



One of the reasons that I referred this currency as a challenging currency to trade for the coming week is the following Daily chart . As you can see it is right below the lower band of the pitchfork and EMAs. This is a bearish sign where on Weekly this can easily go to a correction phase for a while until it reaches the EMAs.
On 4h TF I will watch this area carefully for any bearish evidence. If failed to hold the price below then Sterling will remain bullish for a few weeks.



it is interesting to watch the correlation between UK Gilts and Sterling weighted average. They are negatively correlated. I do not see any significant reversal in Gilts hence Sterling is still bearish .




CAD

USDCAD
The most beautiful bearish CAD set up belongs to EURCAD Weekly. Just go to Weekly and see where it pulled back. Regarding USDCAD I wanted to see this to visit the rising trend line on Weekly TF where it broke it in June but so far that has not happened yet. Still bulls are interested in this market and on Daily it is still trading above the EMAs. To go Short I would like to see this pair comes off the highs and trades below the EMAs on Daily. On shorter TF like 1h and 15m it already broke the rising trend lines but I would not go short here as it has a tough job to break 1.319 area. A risky trade is to Short here as it is below EMAs on 4h but be prepared for a bounce at 1.319.
Action: Watch 4h chart for a break of the support to go Short

CADCHF
This pair has shown conflicting signals. On Daily it is sitting right above the support and right below EMAs. On 4h it has a small breakout of the falling trend line (resistance) and is trading above EMAs. Weekly and Monthly also look moderately bullish . Overall I would wait for Daily to break either direction to have a better vision on this pair.
Action: Watch Daily for a break of the consolidation area
CADJPY
This pair is the same as CADCHF with no clear vision. In compare with CADCHF it is more bearish as it has more downside room on Daily TF to reach support.
Action: wait for a breakout of the consolidation area on 4h TF

Now let’s review Weighted Average CAD
On Monthly TF CAD is breaking the last layer of resistance and after that it will be very bullish



But on Weekly TF it has a hard job to do as it has to break the median band of the pitchfork . As it can be seen it failed to break the EMAs to go lower and it would be interesting to see if this week it can make a fresh high or not. If Yes then I can easily see the upper band of the wedge formation to visited in a short period of time.



Similarly on Daily it has to break all these layers of resistance to go higher but see the wick 7 AUG candle. It is like a false break lower. That is where it touched EMAs on Weekly and bounced.



And same thing on 4h



One thig that makes me thinking about CAD Bullishness is the CAD Yields. They are positively correlated as you can see in the chart below but notice how CAD Yields are falling and CAD currency is consolidating. Will CAD drop finally? Tough question to answer but I like NZDCAD , EURCAD Short and mutual on CADCHF and CADJPY . USDCAD and AUDCAD also will become bearish if break the rising trend lines on 4h TFs.




CHF

USDCHF
This pair is bearish on Weekly TF and On daily it seems on Daily it made a false break of the highs on FRI and reversed. The reversal was not significant hence we should wait for a further pullback below 0.9757 to sell it.
Action: Sell below 0.9757 (about Friday’s Low)

CHFJPY
On Monthly and Weekly it is trading below the EMAs and RSIs heading lower but price action is not convincing to go short with so many dojis and candles with small bodies. On Daily look bearish too but on 13 AUG it made a very worrying break lower and bounced which makes me hesitant to go short until this area visited again and price goes lower. A clear break of 4h TF is what is required to go Short
Action: Watch 4h for a breakout of consolidation area

Now let’s review Weighted Average CHF

On Monthly in AUG it made a fresh new high since SEP 2015. CHF is very bullish now.



See how much room it has IF it goes higher…

On Weekly there is not resistance what so ever any time soon! Last week it pulled back slightly and the question is how far CHF can retrace?



To answer this look at Daily chart . It is easier to complete the rotation before it goes to retracement phase than going lower. It just visited EMA14 and there is 1% distance to the most recent support.




On 4h TF CHF just visited a key support and it is about to bounce.



CHF is Bullish , the question is where the best spot is to buy it.

JPY

USDJPY
This pair is very bearish on Monthly TF but on Weekly it just bounced off the support last week. This conflicting signals are applicable for Daily and 4h charts too.
Action: Watch Daily and 4h chart for further evidence

Now let’s review Weighted Average YEN

On Monthly TF, like CHF it is breaking all different layers of resistance and a close above the current resistance level can easily lead to a visit of the median.



On Weekly TF also the last candle closed above the resistance and I think it can visit the median by the end of AUG.



On Daily although it is still bullish but it has reached some levels of resistance and may visit the lower band of the channel before completing the rotation and visiting the upper band of the pitchfork .



Last chart on 4h TF suggests that YEN has found some level of support and it is ready to rise.

In conclusion I think for the coming week EURO and NZD are bearish and AUD, CHF and YEN are Bullish . Sterling and CAD are mutual to bullish .




If you found this post useful please LIKE and leave a comment.


Regards,


KHAN
I like your channel and very informativ post!!
Reply
khansalarehsan Bullandbeartrading
@Bullandbeartrading, Cheers mate. Thanks for your comment. Regards
Reply
Excellent first class analysis, the time and effort taken into the research not only in technical but the fundamental is first class. Producing the detail in not only text but also in graphical illustration stands this post out from all others.

Excellent work
+2 Reply
khansalarehsan ForexTradingRoom
@ForexTradingRoom, I really appreciate. Many thanks for your comment.
Reply
Erland khansalarehsan
Great insight and well outlined thoughts. I do agree with uncertainties indicated on some pairs and they are not welcoming to trade as higher timeframes contradict lower ones. And yes, GBP may be going positive for the coming weeks, AUD is one of the pairs to buy soon as well. EUR is a sell on rallies for the coming weeks and Monday European open should be watched closely for a good sell entry. We are on the same track.
+1 Reply
@Erland, Great to hear that you agree mate. Yep Euro is bearish for the coming week. I think NZD is both technically and fundamentally ready for a break lower too. Thanks again.
Reply
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