Weekly Commentary: 16th June 2013

Previous weekly commentary: Commentary on 9th June 2013

Hi Readers,

USD Index continued its journey south with strong conviction, showings signs that the bears are back. The week closed at 80.80, breaking the support level around $81.40 (mentioned last week). Looking at price right now, my bias is short but I’m also aware that price might be a little over extended. With that, I would expect a correction soon.

The following is my watch list for the week:

16 Jun - EURUSD Daily

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  • EURUSD – As mentioned last week (see article), I was expecting price too pull back to the bottom of a short term upward channel (not shown here) before going north again. Unfortunately, price was more bullish than expected and it moved further north instead.

Looking at the bigger picture, this seems like a reasonable move as I can see a potential upward channel forming. Nonetheless, I always like a healthy price cycle and I would expect price to pull back at one point. Will it definitely pull back? No one knows.. But if it does, an ideal situation would be for price to retrace back to around 1.32+ price area (yellow circle) and my next target would be the next resistance level around 1.37.

16 Jun - GBPUSD Daily

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  • GBPUSD – This pair, like the EURUSD, has been pretty bullish as well. However, unlike EURUSD, the bigger picture seems a little more bearish. With such bullish price action, I would expect price to either continue to head north (blue path) or to pull back before going the bulls kick in again (green path). With the bearish channel still intact, my conservative target is the top of the downward channel.

16 Jun - USDCAD Daily

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  • USDCAD – Again, looking at the bigger picture, price looks like it’s about to hit the bottom of upward trend line. Although the USD has been pretty bearish, the loonie has been holding quite well with longer term bullish price action. Ideally, I would be looking for a long entry around the purple box – a confluence of the trend line (blue circles) and a soft support level 1.009. However, with such bearish USD, I would not be surprise if price breaks below that. Looks like a bumpy road ahead.
  • AUDUSD & NZDUSD – As mentioned on the 12th June (see article), the Aussie and Kiwi showed potential reversal. As price has moved in favour, make sure to manage your stops wisely. Although this looks like a good reversal, it could potentially turn out to be a short term correction.

 

Anything can happen in the market place, remember to trade what you see and not what you think. Thank you for reading and happy trading week!

 

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