Weekly Analysis (17/01/2016)

Posted on Posted in Weekly Analysis

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

The Cable has had another disastrous week, continuing to weaken. As per my last blog post I said I would like to see a retracement up to 1.46 which we closed under at the end of the previous week. On Monday, price did move back up to that level but bounced off the area and headed back down. Tuesdays action saw price move all the way down to the long term support area of 1.44, price bounced and stalled around this level for a few days, however by the end of the week we had broken through this level and made a strong close. All in all, the pound dropped around 250 pips in a week.

Now we have broken and closed below 1.44, the next target is 1.40 and if that’s broken, it opens it up for further moves down to 1.36, the lowest level its been since 2001. But this is a long way off yet.

GBPUSD_TV_Daily_17012016

> Resistance Areas: 1.48, 1.46 & 1.44
> Support Areas: 1.4000 & 1.366

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 moving lower. This is in line with OBV itself which is has followed price and made new lows.

GBPUSD_NT_Daily_17012016

As with last weeks analysis, now we are below the 2015 yearly lows, I am bearish on this pair and will look to get short on any retracement (up to 1.44) to enter and get on board any move continuing down.

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EURUSD

The EUR has been in a range this week. Having been contained between a short term trend line and the 1.0808 level which has acted as decent support a number of times in the past. Once again price moved back towards this level and mid week saw price bounce back up off it. Friday’s candlestick broke out of the short term trend line, however was unable to stay above it as it closed back below the line.

This pair seems like it getting ready for a break. I’m more in favor of a break to the downside, but I would like to see a convincing close below 1.0808. If there is movement upwards, the resistance levels of 1.10 and 1.11 will likely cap the pair.

EURUSD_TV_Daily_17012016

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

On NinjaTrader Order Flow has yet to re-print since stopping last week. Psych Momentum has moved to the bullish side having crossed its 0 line. OBV LinReg is currently testing its mid point, and OBV itself has actually posted lows when price has been moving slightly higher, creating divergence which we need to be aware of.

EURUSD_NT_Daily_17012016

Since Order Flow hasn’t printed any bullish signals, but Psych Momentum is bullish, OBV showing some bearish divergence and the fact we are still in a short term range, I will be waiting for more convincing directional movement before entering a trade on this pair. This will be one to watch over the next week or so.

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AUDUSD

Having broken out of the wedge pattern the previous week, we saw price stall a bit just above a long term downwards trend line and between several resistance areas. Monday and Tuesday’s candlesticks created an Inside Bar, indicating the market is stalling and trying to make up its mind on a direction. Wednesday price action saw the market move up, breaking the upper boundary of the mother candle of the Inside Bar, however it didn’t have enough momentum to stay above this level and consequently closed back down below the same boundary. What’s interesting to note about this is that it had now created an Inside Bar Fakey candlestick pattern in the direction of the trend with the added bonus of a bearish pin bar. I highlighted this Fakey pattern on my twitter, and by Friday’s close we did see a strong close some key levels. These were the long term downwards trend line and the important 2015 lows at 0.69.

AUDUSD_TV_Daily_17012016

> Resistance Areas: 0.740, 0.725, 0.706, 0.701, 0.695 & 0.69
> Support Areas: 0.675

Reviewing NinjaTrader, we can see that Order Flow is bearish, along with Psych Momentum. Similarly OBV LinReg also fell below it’s 0 line. OBV with the strong movement in price, has broken below it’s range that it was stuck in since mid October. Interesting to note that price dropped convincingly on Friday’s bar but OBV recorded a slight uptick, which may point towards a move back up before moving lower.

AUDUSD_NT_Daily_17012016

As we are now closed below the wedge pattern, the 2015 lows, Inside Bar Fakey pattern and long term downwards trend line, I am definitely bearish with this pair, however I will look to get onto any moves lower on retraces back up to 0.69 / 0.695.

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NZDUSD

Similar to the AUD the Kiwi made moves downwards over the past week with Monday, Tuesday and Wednesday’s bars creating the same Inside Bar Fakey pattern. The Fakey bar created a bearish candlestick off 0.658 resistance, and subsequently price continued to make moves lower. Although price did move lower, Thursday and Friday’s bars created long lower wicks, crucially with Friday’s candlestick bouncing off the supporting trend line from 2015 lows. We closed the week above the 0.645 area where we saw price bounce off in mid November 2015.

NZDUSD_TV_Daily_17012016

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

Reviewing NinjaTrader, Order Flow has stopped printing it’s bullish signal, however has yet to print a bearish one. Psych momentum has just moved below its 0 line and OBV LinReg, although above it’s mid-point has turned lower. OBV has been moving in lower in line with price.

NZDUSD_NT_Daily_17012016

We could see movement higher if this 0.645 – 0.650 zone can support price enough to force it higher. In which case I will be looking for entry levels to get short at 0.65 or if price moves that high, up at 0.658.

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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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