Weekly Commentary: 18th May 2014

Previous weekly commentary: Commentary on 11th May 2014

Hello Traders,

This week the USD Index closed higher at around $80.10. To be honest, I would prefer to see another weekly bullish trend bar but you don’t always get what you want.  As always, I need to see another higher high for a more convincing bullish market – price needs to break and close above $80.80 for that to happen. With that, the next 1-2 weeks will be important to give me a clearer direction.

The following is my watch list for the week:

18 May - USDCHF Daily Forex Chart

 

(Click on image for larger view)

  • USDCHF – In line with the EURUSD, the Swissy has given use a nice reversal pattern but in the opposite direction. The Wedge pattern combined with the double bottom shows signs that the bulls are in control. Looking at the chart above, the double bottom was an early signal for reversal but price is now testing the previous high and this will confirm the failure of the old trend on the bigger picture. I will be watching close to see if I can find a long setup from here.

18 May - EURAUD Daily Forex Chart

 

(Click on image for larger view)

  • EURAUD – As mentioned on the 4th May (see article), I was looking for a short continuation as price tested the neckline of the Head and Shoulder pattern, and I got what I was looking for. While price patterns don’t always materialise, this was one of those moment where you can see a text book setup. With that, I will be watching the next price action as it approaches the next support level (~1.413).

18 May - EURJPY Daily Forex Chart

 

(Click on image for larger view)

  • EURJPY – Thanks to Euro weakening, we have another pattern that worked out in my favour. In line with the commentary on 4th May (see article), the triangular breakout pattern worked out nicely. At the same time, price also presented an Inside bar breakout patterns – something that I discussed in my book. From this point onwards, let’s see what happens when price tests the next support level.

 

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

 

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