Weekly Analysis

Weekly Analysis (04/01/2016)

Hi Guys,

It’s been a little over two weeks since my last post due to the Christmas & New Year period. But I am now back and will continue to post weekly analysis throughout 2016.

This weeks post covers my view on Cable, EUR, Aussie & Kiwi.

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


In my last post for the Cable, price was around the 1.4900 level having just broken through a support trend line and support zone at 1.4950. Price continued on its path of creating LL’s & LH’s, and was beginning to tighten up, however price had broken below the support trend line keeping price within its range, and after a retest of the 1.495 zone on the 24th December, price was once again rejected from this area. Interestingly Christmas day created an inside bar pattern off the resistance zone and on top of the downward trend line, which saw Boxing day’s action move price further south.

I am strongly bearish on this pair at the moment, (currently with a position bearish), however we are closing up on a key support level. 2015 yearly lows at the 1.460 zone will be key for price action and will likely cause a bounce back up. If we do manage to break this level the next key support areas lie at 1.440 (which was key in 2009 and again in 2010) and the 1.400 level itself (key between 2000-2002 and again in 2009).


> Resistance Areas: 1.510 & 1.496
> Support Areas: 1.460, 1.440 & 1.4000

Reviewing the Cable on the NinjaTrader platform, we can see that Order Flow is still printing bearish, the Psych momentum still bearish. OBV LinReg despite moving back up towards its 0 line has reversed and OBV itself has continued to make new lows following price.


Despite the Christmas period, the cable has made some major moves. As mentioned previously I am bearish on this pair, but will be wary of the 1.460 level for a potential bounce, which could possible bring it back up into the downwards trend line that has acted as support but now resistance.


Before the Christmas I mentioned I was in a short position in the EUR, but was wary of the 1.08 area as support. I had moved my stop to 1:1 RR, which unfortunately got hit when price bounced off this level.

As of writing we are now back at this same level having moved up to 1.100 and back down again over the two weeks. We are still yet to close below 1.08 however, but not being able to break above 1.100 and the last candle to print closing bearish, it seems the EUR wants to go further south.


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

On NinjaTrader Order Flow is bearish, the Psych momentum is also bearish but recently tested its mid point. OBV LinReg is also below its 0 line with OBV itself ranging along with price.


If we get a strong close below 1.08 we could see the EUR return back to 2015 lows.


Before the holidays in my last weekly analysis, I identified that the Aussie was tightening up in a long term wedge pattern. On the 17th December we hit the rising trend line of the wedge and since then price has risen and rejected the upper wedge trend line. Currently (Monday 4th Jan) has moved away from this level and broken through the key 0.7250 level and are heading back towards the rising wedge trend line.

If price bounces at this trend line again we will see price tightening up even more which may lead to the possibility of an explosive move outside of the wedge.


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

Reviewing NinjaTrader, we can see that Order Flow has recently turned bullish, Psych momentum is also bullish. OBV LinReg is testing its midpoint and OBV is still within its long term range with no clear direction.


I am probably still bearish this pair especially as we are below 0.740 & 0.735 and still being contained within the wedge pattern. But will look for a good entry point.


When I last reviewed the Kiwi Dollar last, I mentioned in my weekly analysis that 0.689 zone could be resistance if price made it that high. We have seen recently that price has hit this level and rejected it strongly. At the time of writing (Monday 4th Jan) price has moved back down to the support zone of 0.674 and the upper side of the long term downwards trend line that price broke through on the 22nd December.


> Resistance Areas: 0.689
> Support Areas: 0.674, 0.65-0.645 & 0.624

Reviewing NinjaTrader, Order Flow is bullish, Psych momentum is also bullish, with OBV LinReg above it’s 0 line. OBV itself has also been rising along with price.


Now we are above the long term downward trend line and have been steadily rising since 2015 lows, I’m taking more of a bullish stance, however will be wary of the resistance zone up at 0.674 and would prefer a strong close above this level.

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.