Weekly Commentary: 22nd June 2014

Previous weekly commentary: Commentary on 15th June 2014

Hello Traders,

The USD index remained stagnant again and there was not much movement. As price continues to test the $81 resistance, price continues to consolidate. My view remains consistent with previous weeks and I need to see a clear and committed break out in any direction before I bias because I’m just a follower of price and nothing more.

Also, some view this as a seasonality reason. As the summer months continue to roam, is this the cause for the quietness of the market? Or is the world cup stopping it from being active? My thoughts are to ignore these reasons and make sure to watch price. They could be the cause of it but you are the master of your trade, so it’s your decision and nothing more.

The following is my watch list for the week:

22 Jun - USDCHF Daily Forex Chart

(Click on image for larger view)

  • USDCHF – As mentioned on the 8th June (see article), price made a double bottom and it broke above a soft resistance level. As mentioned earlier, price did not move above the 0.891 level with commitment and I was not too comfortable with price action. However, price seems like it is testing that level the second time and potentially forming a double bottom continuation pullback (as discussed in my ebook – Read More). Is this going to move higher? Let price show me more directions.

22 Jun - USDCAD Weekly Forex Chart

(Click on image for larger view)

  • USDCAD – As mention on 25th May (see article), price was getting choppy and I needed more confirmation as to where price was heading. In the end, the bears seem like they are taking the lead.

After much analysis on the daily, it is time to move back to the bigger picture and the chart above is exactly what I’m looking for. Price has tested the top of my price channel and it is now moving lower again. As price approaches the near-term price support (~1.067), will price break below it or will price move higher? My personal preference is for price to move even lower before moving back into the upward trend. Where and when will price resume back into trend? Well, I guess that’s the million dollar question.

22 Jun - GBPAUD Daily Forex Chart

(Click on image for larger view)

  • GBPAUD – Now that the EURAUD – the cousin of this currency pair – has materialised according to plan (see article), I happen to find a not too dissimilar pattern here. Just to be clear, even though I use the term cousin, my bias is independent of what EURAUD has done. In fact, the correlation between EUR and GBP is not great at the moment, hence causing the EURGBP to move aggressively.

Looking at the chart above, price is currently in a nice downward channel and also retesting a soft resistance. Price made a new lower low in mid April and has been moving sideways since. Will price move lower too? 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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