Weekly Commentary: 25th Aug 2013

Previous weekly commentary: Commentary on 18th August 2013

Hi Readers,

As mentioned last week, the USD index continued to be in choppy water. The battle continues as the bears continue to lose ground and the bulls slowly pushes the bears away. Also, looking at the technical set up, $81 is still holding well and the potential for price to bounce north seems more likely. Unless a big bear comes in, price action seems to suggest a rally.

The following is my watch list for the week:

25 Aug - GBPUSD Daily

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  • GBPUSD – As mentioned on 21st Aug (see article), I was looking for a breakout from the rising wedge. Price showed a nice daily high test bar on the same day and it broke the wedge the next day. Though you don’t get it often but, I must say, it was a beautiful textbook set up.

Looking at the bigger picture, it looks like there’s a long way to drop. With that, I’ll be looking for short entries on any pullbacks.

25 Aug - USDJPY Daily

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  • USDJPY – As mentioned on 15th Aug (see article), price action followed my forecast and it is now testing the upper limit of the bigger triangle with a doji (Friday bar). Looking at the bigger picture again, price seems like to continue on the bullish trend. If price breaks outside the triangle, I would be keen to take a long entry on a retest. As shown above, I’m expecting price to re-test either the downward trend line or the soft horizontal (~99.8).

You can never be too certain what price will do, so I’ll always look for alternative and an obvious one is for price to drop and break out of the triangle on the opposite side. Let’s see what happens from here and will let price action take the lead.

25 Aug - USDCAD Daily

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  • USDCAD – This pair has been cycling nicely in the channel and I love it when channels are intact. You can also see a nice support (previous resistance) level (~1.04) being tested several times in the last few months. But on Wednesday, price broke above that level with conviction and it looks a little over extended at the moment. I would like to see price test the level again before going north and hope to find a good long entry.
  • EURGBP – Price is now testing the resistance (previous support) level (~0.86). As mentioned last week (see article), I’m going to continue to look for short entries and a good opportunity looks like it’s just around the corner. Look forward to see the price action in the coming week.

 

Thank you for reading and happy trading week! Please post any questions or comments that you may have at the box below.

 

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