Weekly Analysis

Weekly Analysis (10/01/2016)

Hi Guys,

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

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GBPUSD

Since last week we the pair continued to weaken, having dropped further every single day. My previous blog post highlighted these lows as a target (my bearish position hit it’s 2:1 target), with the potential of a bounce from the support. Although Thursday’s candlestick made a nice re-trace from the lows (1.46) during the day, a follow through bounce upwards didn’t occur. This is mostly thanks to Fridays price action, with the USD strength after NFP figures, we saw a strong close below the 2015 lows.

The next major support level is down at 1.44, however before we get there, I’m anticipating some sort of retrace at least up to the yearly lows of 1.46, to then continue down.

GBPUSD_TV_Daily_10012016

> Resistance Areas: 1.496, 1.48 & 1.46
> Support Areas: 1.440 & 1.4000

Reviewing the Cable on the NinjaTrader platform, OrderFlow has continued to print bearish, along with Psych Momentum. OBV LinReg is still below it’s 0 line and has been printing lower. This is in line with OBV itself which is has followed price and made new lows.

GBPUSD_NT_Daily_10012016

As we are below the 2015 yearly lows, I am bearish on this pair, I will look for any retracement to enter and get on board any move continuing down.

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EURUSD

At the beginning of the week saw the EUR break through a support area I had identified at 1.0808, with a convincing close. However Wednesday and Thursday saw bullish action and pushed price back above the support area. Friday’s price action amongst the NFP numbers created a large pin bar, off the 1.0808 level.

We are still however being kept under a short term trend line and are still below key resistance level 1.11.

EURUSD_TV_Daily_10012016

> Resistance Areas: 1.11 & 1.146
> Support Areas: 1.0808 & 1.052

On NinjaTrader Order Flow stopped printing bearish on Wednesday and subsequently price moved up. Psych Momentum also moved above its mid point, having been moving up since price lows of early December. OBV LinReg however is yet to cross its 0 line, with OBV not making any highs or lows.

EURUSD_NT_Daily_10012016

Since OrderFlow hasn’t printed any bullish signals and the fact we are still below the short term trend line and key resistance levels, I have a more bearish sentiment on the pair, but will look out for any weakness to jump on a bearish trade, especially if we break below 1.0808.

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AUDUSD

The Aussie Dollar has probably seen the greatest movement over the past week dropping over 300 pips. As with the Pound, it moved lower five days in a row.

After last Friday’s pin bar formation off the top of the wedge pattern, price strongly dropped towards the bottom of the wedge, and on Wednesday we saw price smash through the supporting trend line of the wedge and produced a strong close. This was followed up on Thursday and Friday with a continuation of the downwards momentum and saw it move through some key support areas.

We ended the week with a strong bearish close, currently sitting at a support level (0.695) and the upside of a long term downwards trend line.

AUDUSD_TV_Daily_10012016

> Resistance Areas: 0.740, 0.725, 0.706 & 0.701
> Support Areas: 0.695 & 0.69

Reviewing NinjaTrader, we can see that OrderFlow, although hasn’t printed a bearish signal, did however stop printing a bullish one. The Psych Momentum is currently testing it’s midpoint, similarly OBV LinReg is also testing it’s 0 line. OBV with the strong movement in price, has started to break below the range it has been stuck in since mid October.

AUDUSD_NT_Daily_10012016

Having mentioned that any move out of the wedge pattern would be dramatic (although anticipated a week or so longer of price tightening) we have clearly seen strong bearish movement away from this wedge pattern, breaking through several support areas in the process. If we break below the long term downward trend line, it opens itself up for continued downside. However I will be looking to get onto any retracement, particularly up at 0.701.

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NZDUSD

The Kiwi Dollar had a similar week to the Aussie, having five consecutive days where price moved further South. Having hit up against a resistance level at 0.688 area we saw a sharp move away from this level. In the process it took out a support level at 0.674 and closed below a long term downwards trend line. Having a brief period on Thursday where price bounced off 0.658 level and an upwards trend line, Friday saw a strong break of both these levels, finishing the week closer to the 0.650 support zone.

NZDUSD_TV_Daily_10012016

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

Reviewing NinjaTrader, Order Flow stopped printing it’s bullish signal, however has yet to print a bearish one. Psych momentum is still bullish, with OBV LinReg above it’s 0 line. OBV itself has continued to follow price, making new lows.

NZDUSD_NT_Daily_10012016

Now we are sitting below the long term downwards trend line, broken through key support, the Kiwi is very bearish at the moment and I will look to join the momentum at a good opportunity if price moves back up towards any resistance levels.

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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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