Weekly Analysis

Weekly Analysis (10/04/2016)

Hi Guys,

It’s been a while since my last post, have had no internet access over the past week or so, finally came up with a short term solution, so weekly posts should be back on track. And stepping away from the market for a while and coming back gives a fresh look to the charts, a lot of interesting set ups and price analysis coming up.

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 over the last few weeks has created some interesting market structure to watch out for. Having made new lows at the end of February, price was creating a LL & LH structure pattern, however we have yet to see the GBP put in another LL. Price seems to be supported at the 1.40 zone as over the past month, this price area has continually push price back up away from this level.

Mid way through this past week we saw price again attempting to push into the 1.40 zone. Again it got rejected, creating a pin bar in the process, but has consolidated within the candlestick on Thursday and Friday creating an inside bar formation at support. This could interesting to watch in the coming week, to see if the 1.40 zone has still got enough to hold price above it.

Although it may not be a textbook example, price has also been printing a Inverted Head & Shoulders pattern. The left shoulder being the low in mid-January, the head being the low of the year at the end of February and the right shoulder being the dips back down to the 1.40 level. The neckline is the trend line from 2016 highs (start of Feb @ 1.46 area) across to lower high at 1.45 in mid-March. If the 1.40 level breaks or price ranges (between 1.40 & 1.44) for the next few weeks then I would think this set up would be invalid, but if we see price bounce from its current position, up to the neckline, with a break, this could be a good spot to get long.

GBPUSD_TV_Daily_10042016

> Resistance Areas: 1.510, 1.48, 1.46 & 1.44
> Support Areas: 1.40 & 1.366

Reviewing the Cable on the NinjaTrader platform, we can see that Order Flow is indecisive at the moment, currently not printing any signal. Psych momentum is bearish, however has been in an uptrend since the beginning of the year. OBV LinReg although above its 0 line has moved down slightly. Similarly OBV itself has ticked down along with price, but is still above lows at end of Feb.

GBPUSD_NT_Daily_10042016

Although price has been contained between 1.40 & 1.44 over the past few weeks, there seems to be some good set ups occurring. With the inside bar at key psychological support, we could see price push back into 1.44 and test the neckline of the Inverted Head & Shoulders. If price fails to make a clean break up at this level, the downside will likely presume.

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EURUSD

The last week in the EUR Dollar has been very consolidated, with pretty much every candlestick this week producing long wicks on either side of their body indicating a lot of indecision. This isn’t too surprising considering we are now up at the strong resistance zone of 1.145. Previously this has been a key turning point in the market and since the start of 2015 price has remained below this level, only once popping higher briefly in August 2015, before moving back below.

We have short term support below the current price level from a double top 1.33 to 1.35 area back in Feb and mid-March this year. And having broken strongly above this, we are currently in a consolidating range, having tested this level several times in the last week, but haven’t seen any strong close below.

So we are stuck between 1.35 support & key 1.146 resistance. Due to the fact we haven’t seen a strong sell off from this level, along with indecision candlesticks for a week, I’m thinking this could be a lull in the market before price pushes higher and break out above the 1.145.

EURUSD_TV_Daily_10042016

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

On NinjaTrader Order Flow has yet to print any signal. Psych Momentum is bullish although ticked slightly down. OBV LinReg is also below its 0 line with OBV ranging a bit similar to price.

EURUSD_NT_Daily_10042016

Since lows in December 2015, price has been moving steadily higher, now we are at a key zone with week long consolidation with no dramatic rejection of price, I feel this may pop higher. We shall see what price does this week.

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AUDUSD

Over the past few weeks we have seen the Aussie break above the key 0.76 resistance zone. Although there isn’t much in the way of strong resistance levels above this area price has now fallen back below. Thursdays price action created a bearish engulfing bar off the key resistance, encompassing an inside bar formation from Tuesday and Wednesday’s action, suggesting some more downside is to follow. Friday’s bar, although closing bullish has a rejection wick and is now itself an inside bar. If price breaks the low of this inside bar / engulfing candle at around 0.748 then this would open up more downside back towards the 0.74 support zone and the upwards trend line starting from the lows of 2016 in January.

However, if this break of short term support doesn’t happen, I’d expect price to go back up and re-test 0.76, and I will see what forms in terms of taking a bullish or bearish stance.

AUDUSD_TV_Daily_10042016

> Resistance Areas: 0.76
> Support Areas: 0.706, 0.695, 0.69, 0.725 & 0.74

Reviewing NinjaTrader, we can see that Order Flow is still bullish, along with Psych Momentum .OBV LinReg is above its 0 line and OBV has moved up along with price, although hasn’t made a new highs like price has, something to keep an eye on.

AUDUSD_NT_Daily_10042016

If 0.748 breaks, could see more downside to trend line and 0.74 support level, but as recent trend momentum is bullish, a re-test of 0.76 resistance zone could be likely. Any strong break above this could produce a good entry point to go long.

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NZDUSD

Although having broken above the key 0.689 resistance level, price created a couple of long upper wicked candlesticks indicating some resistance, and subsequently the Kiwi moved back down towards 0.674-0.669 again where price has been coming back and forth from. Tuesday and Wednesday’s candlesticks created an inside bar formation, with Thursdays candlestick forming an inside bar fakey pattern, suggesting further downside. And although Fridays candlestick close bullish, similar to the Aussies Friday candlestick it has a fairly long upper wick and has stayed inside the range of the original inside bar.

I’m expecting price to continue on further down to re-test the 0.674-0.669 area and possibly the upwards trend line starting from lows of 2016 in February., to then move back up once again to test the 0.689 level.

NZDUSD_TV_Daily_10042016

> Resistance Areas: 0.689
> Support Areas: 0.674-0.669, 0.65-0.645 & 0.624

Reviewing NinjaTrader, Order Flow has been printing a bullish signal, Psych Momentum has also stayed bullish, with OBV LinReg just testing it’s 0 line from above. OBV itself has followed price somewhat but failed to make new highs when price did when it broke out above 0.689.

NZDUSD_NT_Daily_10042016

The Kiwi has been on an upward path since the start of the year, and now we have seen price break above the 0.689 level, I am expecting a move back up towards the level, but first anticipate a re-test of the 0.674-0.669 support zone.

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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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