Weekly Analysis

Weekly Analysis (21/08/2016)

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


After breaking out of its grinding range at the start of August, the pound dropped down and put in bearish bars practically every day since, until it touched the low just above 1.285.

The candles which printed as price fell weren’t overly strong or large compared to the candles around it. It wasn’t until Tuesday this week that we saw a significant move, but this time bullish and a reaction off the 1.285 level. Following this large bullish candle, price continued up throughout the rest of the week, but again entered into the range that it was stuck in throughout July. We saw some reaction to this as Friday’s candlestick was bearish after previous opening within the range and closed just inside the price range.

It seems the Pound is going to be stuck within the wider price range of 1.3482 to the lows of 1.285. We are still trading around 30 year lows, we are in uncharted territory, so a almost cautious ranging Pound will likely ensue for the next few weeks.

> Resistance Areas: 1.31, 1.37, 1.40, 1.44 & 1.48
> Support Areas: 1.28



The last two weeks has broken my theory of the Euro putting in lower lows and lower highs as 1.123 level has been broken, and with a large momentum candle on Tuesday. We haven’t quite reached the highs of 1.14, but could get there. However first there will likely be a retrace after four out of five days showing strong bullish movement. Friday closed bearish and was contained in Thursdays candlestick range, forming an inside bar.

There is an interesting level which I think if we see a pullback could provide some key support. First we have the longer term downwards trend line formed by the connection of the lower highs. Secondly price has been moving up within a channel and the bottom trend line of this channel could also provide a bounce. Thirdly where these all meet is at the broken 1.123 horizontal level, which could provide additional support.

We could break out of the inside bar to the upside and never retrace back down to this key area, but if we do see price do so, it could be a good opportunity to go long, providing we get a decent entry signal.

> Resistance Areas: 1.146
> Support Areas: 1.08 & 1.106



Since I last posted price has broken out of a wedge pattern to the upside. Horizontal level around 0.765 was being strongly defended, but price kept grinding higher putting in higher lows until the horizontal support broke. We have now seen a pullback back down into this support zone and two trend lines, one supporting trend line that has been providing price support since the move up from 0.715 and the other a broken trend line from highs.

Looking at the past five days the candlesticks have been posting a lot of long wicks, primarily rejecting moves to the upside, and has been ranging, ever so slightly to the downside back into the support and trend line levels. It itself has created its own little channel, strong breaks of which could determine where price will be moving to next.

> Resistance Areas: 0.784 & 0.79
> Support Areas: 0.74, 0.725 & 0.76



The Kiwi has produced some interesting price action, right up against a resistance level. After making highs at 0.7298 price fell back, but has been slowly climbing up towards the level again. Over the past week, two weeks, price has come into this level and been rejected, leaving quite substantial wicks in the process. There may be some indecision in the market at the moment as Wednesdays bar printed a large indecision candle and subsequently Thursday and Fridays price action was contained within it’s range, all at this key 0.7298 resistance.

Price has bee supported in its rally back up to this level by an upwards trend line, and because of this horizontal resistance, a longer term wedge pattern has formed, and price is tightening up. Will be monitoring this action closely for strong movements in either direction, however favour a breakout to the upside.

> Resistance Areas: 0.742
> Support Areas: 0.674, 0.689 & 0.72


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.