Weekly Analysis

Weekly Analysis (13/12/2015)

Hi Guys, weekly blog post below covering my view on Cable, EUR, Aussie & Kiwi.

Any questions, get in contact with me at  enigmaforex@hotmail.com or @Enigma_FX

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GBPUSD

The Cable had another day this week with over a 180 pip move. After a drop on Monday and Tuesday, we saw price hit the 1.495 area and a support trend line, with price on Wednesday then shooting up regaining the past two days losses and ended higher than the previous weeks close. We hovered around 1.516 area on Thursday before Fridays push higher still. The week closed almost on the nose to the 50 EMA, as well as coming up against a downwards trend line.

The pair still seems to be moving steadily downwards overall, keeping the LL & LH pattern that we have been following the past few months. As long as we don’t break 1.5338 which was the last major swing high in the pattern, we can still have a bearish sentiment on this market.

GBPUSD_TV_Daily
> Resistance Areas: 1.5338 & 1.550
> Support Areas: 1.496

Loading up NinjaTrader, we can see that the long term bearish trend signaled by Order Flow is still bearish. Psych momentum is still bearish, continuing from last week. OBV LinReg has slowly been grinding high, although it is still below its mid-point. OBV itself hasn’t moved significantly, however if we zoom in and look at the last few days it’s moved lower when price has been printing higher, creating a small divergence that should be noted.

GBPUSD_NT_Daily

Since we are still below a few major resistance levels and seems to be following the LL and LH formation I still a bearish sentiment still on this market and will be looking to get in from any move higher at a resistance level or trend line.

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EURUSD

Similarly to the Cable, the EUR dropped on the opening day of the week, however found support off the 1.08 area and made new highs by Wednesday, creating an inside bar of both Thursday’ and Fridays’ bars in the process, bouncing off the 1.10 area.

We could see price continue higher up towards the resistance level of 1.11 before we see any movement to the downside. The large move from the previous week still providing some momentum in the short term.

EURUSD_TV_Daily
> Resistance Areas: 1.11 & 1.146
> Support Areas: 1.08 & 1.052

Looking on NinjaTrader we can see that Order Flow has been printing bearish, although price has made sharp moves higher. The Psych momentum, although risen slightly is still below its mid-point signaling bearish, with OBV LinReg below it’s 0 line as well. OBV again similar to the Cable has created some small divergence recently. At the beginning of the week the OBV indicator posted lower than when it was down at 1.055 and when price made new highs this week the OBV didn’t post higher. Just something to keep an eye on.

EURUSD_NT_Daily

With Order Flow and Psych still bearish and a key resistance just above, I would like to see a move downwards in the next few weeks.

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AUDUSD

Having ended the previous week on a large engulfing indecision candlestick at a key trend line resistance, I said I was in favor more towards the downside. Opening on Monday, we saw this move south which continued throughout Tuesday. In fact my trade hit it’s 2:1 risk reward target before retracing slightly by the end of the day.

The following day saw price create a bullish pin bar off the 0.718 area (which has previously been a bit of a short term support) and price moved back up towards where it began at the beginning of the week. However price bounced off the same downwards trend line which pushed price back into the 0.718 zone by Friday’s close.

What’s interesting about this pair now is it seems to be forming a longer term wedge pattern, slowly tightening up.

AUDUSD_TV_Daily
> Resistance Areas: 0.725 & 0.740
> Support Areas: 0.706, 0.695 & 0.69

Reviewing NinjaTrader, Order Flow started to print bearish after Monday’s bar. Psych momentum and OBV LinReg both crossed below their mi-points as well. OBV is still relatively flat and still contained in it’s sideways range is has been caught in over the last few weeks.

AUDUSD_NT_Daily

With price below the 0.725 level and rejection of the downward trend line twice in one week, I’d expect the following weeks to bring more downside which will be contained within the wider wedge pattern.

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NZDUSD

This week the Kiwi moved up towards the high of the previous weeks action (0.678) having dropped first on Monday, Tuesday saw a small doji indecision bar before Wednesdays price action ranged over 190 pips which ended higher but first moved down and bounced off the 0.658 level. Thursday and Friday’s bars both produced candlesticks with wicks hitting up against the resistance of the 0.678 level, with Friday closing back towards 0.669.

NZDUSD_TV_Daily - Copy
> Resistance Areas: 0.689
> Support Areas: 0.65-0.645 & 0.624

On NinjaTrader, Order Flow printed bearish at the start of the week, stopped printing midweek, before re-printing its bearish signal. Psych momentum has been grinding lower the past few weeks and has finally crossed its midpoint, although it hasn’t made any strong move down as yet. OBV LinReg is below it’s 0 line and OBV has been moving up with recent price action.

NZDUSD_NT_Daily - Copy

I mentioned previously that if we are still below the highs of October and below the long term trend line I would still prefer bearish movement. With Order Flow and Psysh beginning to favor the downside I will be look for a good entry to get short.

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Disclaimer
Market commentary and trade ideas are solely my opinion and are not to be considered as trading advice. Presented in a blog format, it is intended for informative and entertainment purposes only. Please do not follow or act upon these opinions, you should undertake your own analysis and be aware of the risks involved.  
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