Weekly Analysis

Weekly Analysis (23/01/2016)

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

Also if you didn’t catch my guest blog over at LittleFishFX, go check it out, CEO Sam Barry gives us an interesting insight to his trading journey. Check it out HERE. Part Two should be coming out later this week, so keep an eye out for it!


The Cable made some solid gains for the first time this year. The end of the previous week we saw a strong bearish close, Mondays open saw little movement further down, but did produce a small bearish pin bar. Tuesday saw price push further down towards 1.41, only on Thursday did it reach this level, however was pushed back up and closed bullish for a second day in a row. Interesting to note that Thursdays candlestick created a bullish pin bar and engulfed the previous days candle. On Friday we saw price push up towards the 1.435 area, before giving back most of its gains by the close, to end up back where it had opened at the start of the week.


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

Reviewing the Cable on the NinjaTrader platform, Order Flow has continued to print bearish, along with Psych Momentum which has moved lower. OBV LinReg is still below it’s 0 line moving lower. OBV itself has moved ever so slightly up along with price but it still in a long downtrend.


Friday’s bar created a pin bar, but with a bullish close, we could see price move back up to test 1.44 before another move lower, targeting the 1.40 zone.


After the previous weeks close within its wedge pattern its been stuck in for the past month or so, the EUR continued to range during the start of the week. Occasionally breaking out above the wedge, but never posting a solid close above it, Wednesday’s action saw price move back up to test the 1.098./1.10 zone, however was not able to stay at those levels and came and closed within the wedge again. Thursday saw the biggest price movement of the week when it shot down towards the bottom of the wedge and 1.08 support. Subsequently it got rejected and posted a large tailed pin bar, however with a bearish close. After the ECB meeting on Friday, price moved lower and made a solid close below the key 1.08 support, as well as the rising trend line of the wedge pattern.

Next week, I would expect there to be some re-trace to test the 1.08 level again, before continuing down.


> Resistance Areas: 1.11, 1.146 & 1.08
> Support Areas: 1.052 & 1.046

On NinjaTrader Order Flow has still not re-print any bias direction. Psych Momentum has continued to move to the bullish side and OBV LinReg is still just below its mid point. I posted last week that we had a slight divergence with OBV and price, and this has become more prominent this week. OBV has posted lower when price has not made new lows, with the theory that volume pressure will lead price, we could see price continue downwards in line with OBV.


Now we have seen a close below the 1.08 level and a break to the downside from the wedge pattern, the next support is the short term support level of 1.071 before targets of 2015 lows should be thought about. With OBV and price divergence, I am favouring more downside with this pair.


The Aussie saw some big moves occur this week. Having closed below the 0.69 level and long term trend line the previous week, I was looking for some retrace back up into these areas before seeing a move down again. Although price did move up into these retrace levels, it continued up. Wednesdays candlestick was a large tailed pin bar off the lows of the previous week, consequently Thursday saw price shoot up through the 0.695 level up to 0.70 area. Friday continued to climb higher, but was rejected from the 0.706 zone and came to close near its open, creating a pin bar in the process.


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

Reviewing NinjaTrader, we can see that Order Flow is still bearish, along with Psych Momentum (although posting slightly higher). Similarly OBV LinReg is also below it’s 0 line. I noted that last weeks close, although a strong bearish bar, OBV had posted a slight uptick which I mentioned might mean a slight move higher before we go lower again, I was correct, but I didn’t think price would reach as high as it did. OBV this week interestingly has remained flat across the 5 days this week. This could indicate that although price has moved higher, there is no volume supporting this move up.


Considering that Friday’s candlestick produced a bearish looking pin bar off a key resistance zone and OBV has remained flat, Order Flow and Psych momentum is bearish, I am taking a bearish stance with this pair.


The Kiwi ended the previous week with a large pin bar off a rising trend line. During this week we saw that price had actually gapped down a fair distance from it’s close. However during the day price managed to close the gap, but didn’t managed to close above the Friday close. Tuesday saw price move up into the S&R zone of 0.64/0.65 and was rejected and closed bearish with a long wick. Wednesday was interesting as price continued down, broke through the rising trend line which has contained the previous weeks action, but wasn’t able to stay at this level and bounced up to close the day higher, creating a bullish pin bar in the process. Thursday saw price shoot through the 0.64/0.65 zone, getting a slight rejecting off 0.655 but managed to stay above the area. However Friday’s bar saw price move back down into this S&R area where it closed for the week.


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

Reviewing NinjaTrader, Order Flow has still not posted any signal. Psych momentum although currently at it’s mid-point has turned bullish. OBV LinReg is testing its mid-point as well having been above it with OBV following price action.


Although I have an overall bearish bias for this pair, I’ve got no immediately obvious trade set up / direction as it seems there is currently a bit of indecision in the market. So I will be just monitoring this pair over the next week for evidence of a clearly direction.

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.