Weekly Analysis

Weekly Analysis (28/02/2016)

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


The Cable started the week by gapping down from further Brexit speculations. This theme continued into the rest of the week as price dropped three days in a row, taking out the key 1.40 level. Thursday saw a break in the beating of the pound, but only slightly, as on Friday bulls went up to test the 1.40 level but was rejected and hit a new low to end the week. We are now at the lowest level the pound has been at since 2009, and those 2009 levels are creeping up at 1.35/36 area.

Mondays gap of just over 120 pips, actually created a breakout from the short term rising trend line, starting at 2016 lows. It can also be noted that Fridays price action created a bearish inside bar fakey at a key support turned resistance level, signaling further downwards movement.


> Resistance Areas: 1.48, 1.46, 1.44 & 1.40
> Support Areas: 1.366

Reviewing the Cable on NinjaTrader, Order Flow continued to print bearish, along with Psych Momentum. OBV LinReg is still below it’s 0 line although ticked higher and OBV itself has moved down slightly aligned with price.


As we have broken lows of 2016, and made a strong push through 1.40 with a failed re-test, I’m still very much short the cable at the moment. Especially with the bearish fakey pattern.


After closing the week with bullish candle at a support zone, price made no further movement higher and in fact gapped slightly down. Monday saw price drop significantly back down towards the 1.10 area which was the highs of months long range we saw at the end of last year coming into 2016. The next few days saw price hover around this area, with no firm direction. On Friday however price tried to make a break upwards, but was forced down by the bears and moved through 1.10 and closed just below 1.95.

This close is to be noted as it is now below two trend lines, one downward trend line from the highs of 2015 at 1.17 and an upwards trend line from the lows of December 2015 at 1.052. However we may need to be weary as we are back into that long range area, which could cause price to move up and test 1.10 from underneath.


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

On NinjaTrader Order Flow has stopped printing bullish, however Psych Momentum has moved down is however still bullish which has been heading up since the lows of 2016. OBV LinReg is only just below it’s 0 line although has been moving sideways recently. OBV itself has followed price down.


Now we are below 1.11 and have seen a close below two trend lines I have a bearish sentiment for this pair, however will be cautious as momentum is still up and we are back into the area where price ranged for over a month, so there could be some stalling or at least a small push higher before continuing down. Interesting to note that similar to the Cable Friday’s price action, price has created a bearish inside bar fakey set up, again signaling a more biased view to the downside.


Apart from one day midweek this weeks price action from the Aussie saw every daily candle stick move up to and try and close above the key level of 0.725, creating wicks at the top of the candles in the process. This pair has been moving higher since early 2016 and has previously moved up to 0.725 but was also rejected, which created a c. 140 pip move on the next day. Similarly following Thursdays attempt of moving into this level, Friday’s price action moved down over 100 pips. We are now settled just above the key upwards trend line which has been containing price to the upside, it will be interesting to see after such a strong move whether the bulls can push price higher again back into the 0.725 or whether bears have a firm hold on this pair at the moment and price continues to fall and break through the trend line.


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

Reviewing NinjaTrader, we can see that Order Flow has stopped printing its bearish signal, a consequence from the continued upwards movement. Although Psych Momentum has been moving up, it is still bearish and tested its midpoint a few times recently. OBV LinReg has broken above its 0 line and OBV has moved down slightly, breaking an upwards trend line, potentially signaling more of a move to the downside.


With price being rejected throughout the week from 0.725 and then the strong move down on Friday, bears seem to be in control below this level, despite the moves upwards over the past few weeks. We have yet to break out of the upwards trend line and could see another test of 0.725 if the move down isn’t sustained, in which case price will be tightening up further between the trend line and 0.725, hopefully with an explosive breakout.


Since the beginning of February the Kiwi has been caught in a wide range from 0.658 and 0.674. A number of times price has tired to break above 0.674 over the last few weeks, but hadn’t seen any close above it. Interestingly after every touch into the 0.67-0.674 resistance zone price would make a big move back down off this level most up to c. 100 pips. This is what Fridays price action created again, we saw an attempt to push higher but it wasn’t able to sustain the move as it dropped dramatically after touching up against the underside of an upwards trend line created from 2015 lows.


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

Reviewing NinjaTrader, Order Flow stopped posting a bearish signal as a consequence of price moving higher, but has yet to print a bullish signal. Psych momentum currently is below it’ mid point and has been moving lower in a long term point of view. OBV LinReg has just popped above it’s 0 line with OBV itself continuing up along with price.


Last week I mentioned we could see another move up to the 0.67-0.674 resistance area before seeing any moves lower, this week we got the re-test of the area and saw a strong rejection. Price has been moving upwards since the beginning of the year so I will be monitoring price for a break below 0.658 which is the bottom of the current range before a firm short bias is decided. This one will be interesting one to monitor this week.

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.