Weekly Analysis

Weekly Analysis *Late* (8/02/2016)

Hi Guys,

Apologies for the last post again, I’ve been away and haven’t had access to my laptop, and didn’t actually look at the markets either. But back on it now with the first post of February and it seems I’ve missed some exciting moves.

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



After last weeks ranging market the pound finally decided to take some direction with Monday making a close above the 1.44 resistance level that had been keeping price contained. On Tuesday we saw a retest of this level and although it was a bearish close we were still closing above the 1.44 level. Wednesday saw another huge move and moved from 1.44 to 1.46 in one day. Once up at this level price managed to get a bit higher before bouncing off the 50 EMA and creating a bearish indecision bar by the close of the day. Subsequently price broke back down through 1.46 and closed around 1.45.

At the time of writing (Monday 8th Feb), the pound moved down to test the 1.44 area, bounced a bit before closing with a bearish sentiment, with the candlestick creating a larger bodied indecision candle.


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

Reviewing the Cable on NinjaTrader, Order Flow has continued to print bearish even when price has moved higher, along with Psych Momentum which is still printing bearish as well. OBV LinReg is still below it’s 0 line and OBV itself has moved sideways, creating a slight divergence between rising prices.


The overall trend direction is still bearish, however will wait for close below the 1.44 key level before re-jumping on any shorts.


The EUR finally broke away from its two month range, Wednesdays price action saw the pair shoot upwards breaking the 1.10 level and coming to rest at 1.11 area, all in all creating a c. 200 move. This strong movement continued into Thursday closing just off 1.12. Friday’s bar saw a bit of a retrace but bounced slightly off the 1.11 area. We also broke through a downwards trend line created off high in August & October 2015.

At the time of writing (Monday 8th Feb) price again tested the 1.11 but closed bullish, we now seem to be resting in a small range between 1.11 and 1.12 after the huge moves from the previous week.


> Resistance Areas: 1.146
> Support Areas: 1.052 1.08, 1.10 & 1.11

On NinjaTrader Order Flow briefly printed a bearish signal, but on Monday it stopped, but as price shot up it has not printed any bullish signal. Psych Momentum however is bullish shot up after testing its midpoint. Although OBV LinReg is still below it’s 0 line it has moved up slightly. OBV itself shot up dramatically along with price, suggesting there is some good volume to sustain this move upwards.


A close below the 1.11 will signal potential bearish movement, but need to be weary of the trend line that was broken on Wednesday. If there is more upside before we get to the key 1.146 level there is the underside of a upwards trend line to get through, and would expect some bounce off this.


The Aussie has had an interesting week, hitting some key levels and seeing some retraces. After finishing on a Doji pin bar last week price tried to move below 0.706 but got rejected on Monday. Tuesday saw another test of this level and had closed below it, however Wednesday saw price strongly reject both 0.701 and 0.706, finally stopping at the underside of an upwards trend line from 2015 lows. This momentum was carried through to Thursday and price touched up against the 0.725 level before moving away from it. Friday saw another huge move but away from the 0.725 level and ended back slightly below where it started the week. If we look at the weekly chart this has created a huge wicked bearish pin bar.

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

Reviewing NinjaTrader, we can see that Order Flow is still bearish, along with Psych Momentum, although moved upwards slightly. Similarly OBV LinReg is also below it’s 0 line. OBV this week moved up slightly in line with price.


I mentioned in my last blog that I wanted to see a move up to the underside of the trend line before making a move down, this did happen, but moved higher than expected before shooting back down. I am still bearish with this pair.


This week the Kiwi broke out of it short term range to the upside, similar to the Aussie. We broke through the 0.658 level and a long term downwards trend line. After Wednesday and Thursdays strong moves up, price hit up against the 0.67-0.674 resistance zone, before being strongly rejected on Friday.

At the time of writing (Monday 8th Feb), we are now testing the upside of the long term downwards trend line, the 0.658 level and hitting up against the 50 EMA. For further downside I would like to see a strong close of all these three levels.


> Resistance Areas: 0.67-0.674 & 0.689
> Support Areas: 0.65-0.645, 0.624 & 0.658

Reviewing NinjaTrader, Order Flow is still posting a bearish signal with Psych momentum currently below it’ mid point. Similarly OBV LinReg is below it’s 0 line. OBV has been reflecting price and has moved upwards, will have to be weary of this before thinking of any shorts.


I will be monitoring action for a break of 0.658 to the downside or see if we moved back up to test the 0.67-0.674 area. But would like to see confluence on any movement before getting into the market.

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.