A new week has chanced upon us, but do check out the forecast from the previous week. Check it out because both EURUSD and USDCHF have more room to move. EURUSD has gathered a counter-trend bullish momentum whereas the bears are all in for the USDCHF. The USDJPY broke upwards as predicted but fell afterwards. For this week, I’ll add three pairs to the watchlist.
The charts in focus for this week are NZDUSD, NZDJPY and XAUUSD.
Two weeks ago, I pointed out the descending channel on NZDUSD and I was keenly expecting a break of resistance to join in the longs; that never happened. Fast forward, before the trading days for last week ended the bears threw in the towel. On Friday, there was a convincing break of descending channel resistance on all timeframes. Such market structures give out simple and profitable trading ideas. I’m assuredly bullish the NZDUSD even as it remains above the current resistance level.
Here’s to the tricky NZDJPY. Between the price range 72.35 and 71.51, the NZDJPY has carved a descending triangle on the 4 hour timeframe basis. It secured a comfortable 4 hour break and close below the descending triangle but the bears could not hold their grounds. It closed the week back within the range of the triangle. At this point, it could go either way, if it breaks the triangle support again or breaks above the triangle resistance.
If the rules of correlation is anything to go by, my bias towards the NZDUSD will back the NZDJPY to break upwards. But hey! This is the market so I would not get ahead of myself until I see clear breaks.
Also, 2 weeks ago, I talked about a wedge-like formation on Gold. It broke upwards firmly, but only for a little while. It would not be a break I would identify as a false one even thought a lot of traders pointed it out as such. In my view, that was only how far the bulls could take that commodity. On re-analyzing gold, the current market structure that has become obvious is a bullish flag pattern on the daily timeframe. I won’t consider going long until I see a strong break of the resistance.
NB: This pattern on gold is not a confirmed bullish flag until the break above comes. It can also be viewed as a not-so-steep descending channel.
I wish you a profitable trading week!