Weekly Commentary: 10th August 2014

Previous weekly commentary: Commentary on 3rd August 2014

Hello Traders,

The USD closed the week around $81.40 again. Looking at price action, the nice high test pin bar gives me comfort that price is about to retrace. Of course, this can be a pullback or before more higher or it can be a longer term downward trend. The key is to see how price reacts on the support around $79. For now, my short term bias is short and I’ll let price show me more confirmation in the coming week.

The following is my watch list for the week:

10 Aug - EURUSD Weekly Forex Chart

(Click on image for larger view)

  • EURUSD – As mentioned on the 27th July (see article), price broke down below the 1.35 level and I was looking for a nice pullback before looking for new short setups. Looking at the weekly chart above, price closed with 2 pin bars in the last two weeks. This is a good indication that it could start moving higher. BUT… here’s the catch, price did not give me pin bars for no reasons. As shown above, it is currently testing an old minor support level. On top of that, don’t forget that we are still in a major up trend. With that, my bias is a long for now and will have to see how price react when it reaches the 1.348 level.

10 Aug - GBPUSD Daily Forex Chart

(Click on image for larger view)

  • GBPUSD – As mentioned last week (see article), the GBP is currently falling. While the British might not like this, I am liking it more and more. And that’s because the momentum of price falling gives me comfort that a new trend is being established. However, looking at the chart above, price is also approaching the next support level. Will price break lower? Or will it bounce? Either way, I’m looking forward to see some price in action.

10 Aug - USDJPY Daily Forex Chart

(Click on image for larger view)

  • USDJPY – As mentioned on the 6th July (see article), the Yen has been consolidating and, in fact, it was looking more like a descending triangle. If you have been following my commentaries long enough, you would realise that this is one of my favourites. Of course, like all patterns, they have their strengths and weaknesses and knowing them well is what gives us (the traders) our edge. Anyway, looking at the chart above, I can see that price has broken out of the triangle. More than that, it came back down to test the trend line. This is a nice retest and I’m keen to take this long with my near term target (and resistance) of 104.0 in mind. This is important in case it converts from a triangle into a side way range market.

 

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As always, thank you for your support and happy trading week!

 

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