Weekly Commentary: 13th Apr 2014

Previous weekly commentary: Commentary on 6th Apr 2014

The USD Index tanked this week. This was a good reminder because that’s part of trading and you don’t get it right all the time. Looking at the weekly chart, price dropped with momentum, giving me an engulfing bar and closing back around $79.50. Will price drop below $79? Let’s see what we can.

The following is my watch list for the week:

13 Apr - GBPUSD Daily Forex Chart

(Click on image for larger view)

  • GBPUSD – The long watched horizontal level at 1.673 is truly a level that is being tested. The bulls and the bears are really at war to show their dominance in the market. While I cannot influence the market, I continue to look for clues and this week, the clue is a potential double top around that level. Having said that, the bulls seem to be in control at the moment as I did not get the short confirmation that I wanted (see article). Until I get a short below 1.647, I believe the bulls are still a winner but I will watch to see if I get a confirmation of a double top in the coming week.

13 Apr - NZDUSD Daily Forex Chart

(Click on image for larger view)

  • NZDUSD – As price continues to sore higher. I cannot ignore the fact that price is still intact with the price channel I drew in June 2013 (see article). It’s great to see that technical analysis is such a great trading tool to use. Looking at it now, an Elliot Wave theorist might also agree that we could be in a complex wave at the moment and I can potentially see a WXY (or ABCXABC) pattern forming.

Elliot Wave or not, the Y seems to potentially coincide with a simple overlap of my upward price channel (green circles) and long term resistance level (~0.884). In case you haven’t noticed, that level has never been breached (my chart goes as far back as 1993). Let’s see if we’ll get there. Who knows, right?

13 Apr - USDJPY Daily Forex Chart

(Click on image for larger view)

  • USDJPY – The Yen has been somewhat interesting lately. This is especially true because, since my last commentary on 9th Mar (see article), price retested support (~101.5) and went back to the 103.5 level to give us a false break before shooting down aggressively this week, closing the week at the same support level. I like it when there’s a false break as that gives me an idea of change in sentiment. Now, the real test is whether price can break below the green box to give us a fresh lower low?

 

Thank you for reading and happy trading week! Make sure to post any questions or comments at the box below.

 

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