Weekly Commentary: 15th June 2014

Previous weekly commentary: Commentary on 8th June 2014

Hello Traders,

As mentioned last week, I was expecting a more interesting week but that didn’t happen as the USD index did not move much. The market often surprises us but my view remains the same – based on market psychology, the more price consolidates, the more likely it will breakout with strength. With that, I shall wait with patience.

The following is my watch list for the week:

15 Jun - GBPUSD Daily Forex Chart

(Click on image for larger view)

  • GBPUSD – Those of you who have been reading my posts know that I’m not a big fan of reversal trades. However, that does not mean I don’t look for reversals. Cable is a good example of how I’ll find a reversal pattern but will only join the market when I get my setup. My comment on the 1st June (see article) shows the importance of price action when looking for tops (or bottoms) and the lower low that I wanted was not present. The market confirmed that it was a good decision as it moved higher on Thursday and Friday.

Note: This is something that I emphasise heavily in my book “The Secrets of Trading the First Pullback”. Make sure to get your copy if you’re interested to learn more.

Looking at price now, my bearish bias remains the same. The steepness of price is gradually reducing (somewhat parabolic) and the double top could materialise. Nonetheless, the bulls are still dominating, so I won’t be surprise if price moves higher. I’ll continue to sit aside.

15 Jun - AUDUSD Daily Forex Chart

(Click on image for larger view)

  • AUDUSD – As mention on the 5th June (see article), the Aussie was in a clear range. As price continues higher, it is now testing my upper range. It is ready to higher yet? I’m looking for a set up.

15 Jun - EURAUD Daily Forex Chart

(Click on image for larger view)

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  • EURAUD – This currency pair has been moving pretty well in the direction that I mentioned on 18th May (see article) as the head & shoulder pattern played its part really well. Moving forward, I’m looking to see how price would reaction at the 1.41 support level. I would expect a pullback at some stage but it’s quite pre-mature at the moment. Will it break below that support? Let’s wait and see.

 

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

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