Weekly Analysis

Weekly Analysis (11/12/2016)

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

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GBPUSD

> Resistance Areas: 1.281, 1.331, 1.366 & 1.40
> Support Areas: 1.20

After making a new high the previous week, the Pound lost ground this week, apart from Monday the rest of the week produced bearish closes. The fall doesn’t seem as strong as it took all week to move down to the previous Friday’s candlestick open, which was the candle which produced the new high.

Last week I mentioned that this could be a new Higher High, and would like to see a retracement back down into the upwards TL and 1.2523 level of resistance now support. We seem to have got this move, but we aren’t quite there with reaching the are of confluence of support, so this will be a good level to watch out for this coming week to anticipate a continued trending move upwards.

Looking at the NinjaTrader charts, this week on the daily a bearish Psych signal was printed in line with the bearish movement of price with LinReg OBV also crossing below its mid-point. However OBV itself has made new highs in line with high in price.
Dropping down to the 4 hour chart, Psych is still up but LinReg OBV has turned to the downside.
Looking at this chart we can see the evidence of a confirmed breakout play from the previous week. We had confirmation of both signals turning bullish (on 4hr but also daily), a wedge pattern with higher lows forming with a horizontal resistance at that 1.25 zone and then the breakout and close above. This resulted in a c. 240 pip move.

Price has been turning back into the 1.25 area, looking for a reaction if we get this far down again, but Psych and OBV are both up (4hr), its LinReg OBV which has moved below its mid-point along with price that may provide the entry opportunity when it moves positive again. All other confluences will have to also line up, but it could be a good opportunity to jump on the continued upwards trend.

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EURUSD

> Resistance Areas: 1.1456, 1.08 & 1.105
> Support Areas: 1.0521

The opening of the EUR on Sunday evening saw some sharp movement which continued throughout Monday on the news of resignation of the Italian Prime Minister, price managed to bounce between the key areas of 1.0521 and 1.08 before closing higher just below the 1.08 level. This created a bearish engulfing candle on the weekly of the past two weeks. Tuesday and Wednesday saw calmer movements and formed a small inside bar formation, but again the pair saw volatility on Thursday, price moved up into the 1.080 resistance zone and was sharply rejected. Again the second time over the past few weeks we have closed back down at the key 1.0521 support zone, which, if broken, will give us record lows not seen since 2003.

Looking at the volume and momentum on the NinjaTrader charts, we can see on the daily that because of the volatility seen, the Psych has been indecisive having been bullish and bearish throughout the week. The LinReg OBV however has dropped below its mid-point. This indecisiveness is also reflected in the OBV itself having moved sideways all week.
On the 4hr chart similar to the daily the Psych has been up and down throughout the week, the LinReg OBV has been a lot smoother and again similar to the daily has turned bearish at the end of the week and we can clearly see the rejection of price at the 1.08 level.
This provides an interesting opportunity to get short, the daily signals are bearish, the 4hr LinReg OBV is bearish, but the Psych is bullish. If the Psych turns bearish, and lines up with the other signals we can start to look for an entry, this will likely come at a break and close below the key 1.0521 level.

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AUDUSD

> Resistance Areas: 0.76, 0.77 &0.79
> Support Areas: 0.74, 0.725 & 0.70

The Aussie this week has produced a lot of long wicks on the daily candles. The Monday started out with an indecision bar with rejection wicks from above and below. This was again seen on a smaller scale on Tuesdays candlestick (forming an inside bar formation), Wednesday produced a bullish pin bar, Thursday another indecision candle (this time bearish) and Friday a bearish pin bar off resistance. This resistance level that price has been hitting up against the 0.75 area and the support from below is coming from the bullish TL from November lows.

This has formed a wedge pattern, which looks like it is coming to its pinch point soon. One that could present a good breakout opportunity.

On Ninjatader the daily Psych and LinReg OBV are still bullish. Dropping down to the 4hr charts, we have the same story. We can see clearer on the 4hr the wedge pattern, with price making higher lows, but unable to make higher highs due to the 0.75 resistance. If the signals all stay bullish and price breaks above this area, we can look to get long.
I’m still weary of the fact that price has made a big drop since mid-November, but OBV on the Daily and 4hr charts are bullish, in the sense that they are travelling from the bottom left to top right. However this would support the opportunity to get long if we see a breakout.

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NZDUSD

> Resistance Areas: 0.77, 0.74 & 0.72
> Support Areas: 0.674 & 0.689

This week the Kiwi Dollar continued on its path higher. However price got rejected at 0.72 on Thursday, producing a pin bar (albeit bullish) but was sufficient enough to send price down on Friday. This left price on the weekly charts printing a large Doji candle.

This has produced a potential set up for shorts, breaking of the bullish channel after a rejection of key resistance.

On NinjaTrader the daily signals have been bullish for the past two weeks, in line with price movement, however the LineReg OBV has ticked down slightly towards its mid-point. Reviewing the 4hr chart Psych was short for a short period this week, however has returned bullish, although is now testing its center point. LinReg OBV remained bullish although did tick lower for a period.
What’s interesting to point out on the 4hr is the OBV highs and price highs, there is some bearish divergence occurring. This is definitely one to watch with any downside break of the trend channel.

Last week I mentioned I thought this pair could go lower but first might see another re-test of the 0.716/0.72 resistance zone first. We have got the re-test and now need to see a bearish break of the trend channel to get onto a short opportunity.

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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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