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The currency markets are experiencing sharp reversals in the face of major biases, which could be pullbacks or potentially new signals. If you look at your charts more carefully during a busy trading period, you would observe that instruments do not move in straight lines. This is a propensity in the markets; a major bias is punctuated with major or minor retracements, continuations and mean reversion movements.
EURUSD
Primary trend: Bullish
This recently bearish instrument has turned bullish – with the possibility of a bullish continuation. It could be safely said that there is a new ‘buy’ signal in the market. Both lagging and leading indicators have confirmed this. So it is expected that the nearest resistance lines would be breached to the upside as the bullish bias continues. The support line at 1.2900 should check any intermediate bearish threats.
USDCHF
Primary trend: Bullish
The USDCHF should normally go in a contrary direction to the EURUSD, but the bullish bias on the chart is still valid. However, the present bearish correction is so determined and serious to the extent of posing a great threat to the extant major northward outlook. The oscillators have already given the indication of a trend reversal, but the lagging indicators are yet to follow suit. Therefore, it would be OK for to wait for further confirmation before taking any position.
GBPUSD
Primary trend: Bearish
This is a bear market and it could remain so for the next several trading days. The Cable has been plunging slowly and steadily. The issue is that, it would first go upwards on a short-term basis (giving a good chance to sell short), and that is what is happening right now. The price may not be able to reach the distribution territory 1.5200 before going downwards. Eventually the price may reach the accumulation territory at 1.5000, which is not a lofty target.
USDJPY
Primary trend: Bearish
Having given up about 2 weeks’ gain, this pair has been going downwards in some determined manner. After testing the supply level of 103.50, the price has dropped by approximately 200 pips before stabilizing. Since that bearish pullback was extremely serious, it has led to a new ‘sell’ signal on the chart. Right now, there is a Bearish Confirmation Pattern on the chart; which gives a good opportunity for short sellers.
EURJPY
Primary trend: Bullish
The condition on this cross has remained wonderful for the most part of this month. For example, the bullish bias has been maintained in spite of the recent sideways moves and consolidations to the downside. Even the last significant pullback in the market has failed to lead to a clear bearish signal. Oscillators and lagging indicators are yet to generate a bearish signal, and for now, it may sound sagacious to stay out of the market until there is a clear indication.
This article is concluded with the quote below:
“Trading is ONLY about making money. If you can’t do it on a regular basis you are not a trader. Everything else is just conversation.” – Brian Lund
Attribution: Paxforex.com
Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders
