Weekly Analysis

Weekly Analysis (20/12/2015)

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 dropped for 5 straight days this week. The previous week closed up against the 50 EMA and a previous downwards trend line, with the market deciding this would be a pretty good point to sell the pair. Throughout the week we broke through the 1.510 level and the 1.496 area, which I had identified as a potential area to look for a retrace, but price smashed through this level on Thursday. Fridays price action attempted to move back up towards this zone but got rejected, creating a bearish pin bar in the process.

What’s interesting about this pin bar is that it as been rejected by the 1.496 zone but also the underside of a trend line which has been keeping price confined as it makes it way down. Now we have a convincing breakout and close below this area I’m expecting more downside to follow. Price may test the 1.496 level again, but if more down side occurs, there aren’t many significant levels to act as support before we get to 2015 lows at 1.46.

GBPUSD_TV_Daily Long term view

> Resistance Areas: 1.5338, 1.510 & 1.496 (support turned resistance)
> Support Areas: 1.460

Looking on NinjaTrader, Order Flow is still printing bearish, Psych momentum has moved further below its mid point and OBV LinReg has finally produced some downwards movement after it has slowly been moving up towards it mid-point over the last few weeks. OBV itself has made new lows in line with recent price action.
GBPUSD_NT_Daily

As we are winding up for Christmas, we may not see as drastic moves as we have seen over the pasts month. But I still have a strong bearish sentiment with this pair.

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EURUSD

After ending the previous week hovering around the 1.10 level, Monday’s candlestick produced an indecision bar, Tuesday’s bar tired to move further up moving towards the 1.110 resistance zone, however was rejected and ended up printing lower. This bar created a bearish engulfing bar of Monday’s candlestick, providing bearish evidence for further movement lower. Wednesday produced such a move lower after climbing back up and getting rejected at the 1.10 level, creating a bearish pin bar in the process. Following these two strong bearish confluence signals Thursday saw price drop down to 1.08.

In my previous post I highlighted this area as a support zone with the potential of bouncing price off it. This is exactly what occurred on Friday, price tested this level again but ended up moving higher by the end of the day.

EURUSD_TV_Daily

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

On NinjaTrader Order Flow is still printing bearish, Psych momentum is still below it’s mid-point, similarly OBV LinReg is still below it’s 0 line. OBV moved sharply down this week.

EURUSD_NT_Daily

The psychological 1.08 level may be a hard one to break as it has proved a strong support area in the past. Any close below this area will likely prove to produce further downside as it did when it last broke through this level in early November. I am still bearish this market, having got in at 1.10 level and moved stops to 1 RR.

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AUDUSD

At the beginning of the week price was a bit confined with no clear direction, Monday and Tuesdays candlesticks printed large upper and lower wicks with Tuesday’s bar engulfing Monday’s. Although price finished higher on Wednesday it did reject the 0.72 level, the same as the past two days. This 0.72 level has played key S & R roles in the past as this time has provided some resistance for price. Following this rejection price dropped on Thursday nearing an upwards trend line. Friday ended higher albeit got rejected from the 50 EMA.

As mentioned in previous blogs, this pair seems to be winding it’s way up into a long term rising wedge pattern. The upwards trend line providing support to price at the moment it close to a horizontal support of 0.706, so may prove difficult to break through. I think we may have another move upwards and test the 0.72 line again, which will tighten up price in the wedge format and likely produce a strong break out.

If we do manage to break below the wedge trend line and 0.706 level, price is still above a long term downward trend line which will also provide some good support.

AUDUSD_TV_Daily

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

Reviewing NinjaTrader, Order Flow is printing bearish, Psych momentum although bearish has been hitting up against its mid-point, similarly OBV LinReg is below it’s 0 line but is only just below. OBV is still being confined in it’s range that has occurred over the last month or so.

AUDUSD_NT_Daily

I am still bearish this market, although still being confined within the wedge pattern and above the longer term downward trend line, there may be further upside before we start seeing movement towards the lows of this year at 0.69.

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NZDUSD

This pair started the week printing a bullish engulfing bar, which pushed price higher on Tuesday. However price was rejected from the longer term downward trend line. On Wednesday price moved higher creating a bullish engulfing bar in the process which also was a larger sized indecision candle, right on the long term downward trend line. Subsequently Thursday saw a huge drop in price closing just above the 0.669 level. Price recovered a little on Friday although it had a long upper wick off the 0.674 level.

Having stayed below the 0.674 area and long term trend line, I have more of a bearish sentiment. Similar to the Aussie, it looks like a long term wedge pattern could be forming for this pair as well.

NZDUSD_TV_Daily

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

On Ninjatrader Order Flow is printing bearish, Psych is testing it’s mid-point trying to cross below, OBV LinReg albeit below has moved higher. OBV itself has been rising with price indicating more upward pressure, we should be wary of this and look for downward movement from this indicator for bearish confluence.

NZDUSD_NT_Daily

If we break below 0.669 I feel this will open the door for further downside towards 0.658 and the lower trend line of the long term wedge pattern forming.

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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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