Last week started off with normal volatility but it was not until Wednesday, that the market took off rapidly in terms of pip movement. The FOMC meeting minutes finally gave the relatively silent market a reason to move; especially in the USD pairs. The forecasted pairs pulled off no surprises, so it was a pretty good week. However, USDCAD from last week makes it into this week again.
The charts in focus for this week are USDJPY, USDCAD and GBPUSD.
From the weekly timeframe, we are presented with a long term symmetrical triangle that has been in formation from 2016 till currently. I usually trade breakouts but USDJPY has not broken above any of the levels of the triangle yet. That notwithstanding, price is still well contained within the pattern but the price action within the lower timeframes is an interesting one.
The week closed on a bearish note and did a near retest of a former choppy zone as resistance in the 4 hour timeframe. (Do well to watch the video to get better clarity of all the pairs from multi-timeframe analysis). Since the retest was a near one and not to point, one instance I would be expecting would be another clear retest of the former choppy zone.
This choppy zone I talk about is the at the 107.80 area and it is represented with the black line on the shot below. I would discard my bearish bias if this pair closes back above 107.80.
My bearish view on this pair would have an added confirmation when price drops below 106.00
NB: Within the course of the week I held a bullish view over the EURJPY; my instance to consider an entry were not met early and with my present view on USDJPY, I would hold back a bit due to correlation.
USDCAD is that pair which I have been tracking over a matter of months to play the break. And it did so nicely last week. It sits comfortably below the long term ascending channel support but Friday’s move was a countertrend. Between the prices of 1.3240 and 1.3251 is an area where I would be expecting signs of reversal that would agree with the bearish trend which is currently being established. A break above those levels and the ascending channel support would render my bearish view countless.
The bulls are taking over this pair with the current movement. 1.2666 is an area where I was expecting the bears to set in but they failed massively as price overshot that area. I however, am carefully bullish this pair as 1.2777 is another area that has to be broken for me to consider a long on this pair. 1.2777 acted as a strong support level in February this year. With price approaching it again, a breakout or a reversal is what I expect from that level to have an edge.
I wish you a profitable trading week.