Weekly Commentary: 4th August 2013

Previous weekly commentary: Commentary on 28th August 2013

Hi Readers,

As mentioned last week, the USD index finally made a pull back since it’s decent on 10th July. The pull back can be a short term correction or it could be longer term upward trend continuation. To be honest, no one really knows what the market does and there is no really confirmation at this stage. With that, I’ll be watching the price closely especially at the start of the week for clearer indication of direction.

The following is my watch list for the week:

04 Aug - USDGBP 4Hr

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  • GBPUSD – In case you missed my commentary on the 31st July (see article), I have been keeping a close watch on this pair. Price action is not exact science but, on this occasion, it is following my road map and it’s currently re-testing the neckline (~1.53) as per my expectation.

Nonetheless, as the USD moved pretty aggressively on Friday (following the Non-farm data), I will keep a close eye to see if that will follow through on Monday.

04 Aug - EURGBP Daily

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  • EURGBP – On 30th June (see chart), I spotted the range box and was expecting price to break either way. Price did break out and retested the range on the 21st July (see chart). When that happened, I was also cautions of the longer term channel, so I only took a short trade. To be pleasant surprise, price tested the channel on Thursday and started moving south on Friday. Honestly, this pair has been an absolute Gem.

As I write this commentary, I don’t know what price will be doing next (and I never will). However, as the channel is still intact, my rules dictates that I will keep price within the range and, hence, my bias is a short in the near future.

04 Aug - USDJPY Daily

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  • USDJPY – Yen formed a triangle recently and it has broken out of it with conviction. Looking at the pattern right now, price looks like it is potentially re-testing the upward trendline before going further south. This pattern is further supported by a minor resistance level (~99.8) which is actually really near the 100 price mark.

04 Aug - GBPJPY Daily

(Click in image for larger view)

  • GBPJPY – When I wrote last week’s commentary (see article), I was expecting price to break out of the triangle. On Monday, it did exactly that but without giving me an entry. However, price looks like it is retesting the upward trend line again. I’m keen to find a short entry but will wait for the market to open before making the final decision.

While I usually keep all pairs in isolation and independent of each other, the GBPUSD and USDJPY bias mentioned above have given me an extra tick in the box to take GBPJPY short.

 

Thank you for reading and happy trading week!

 

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