Week Ahead 18Th May Technical Analysis From Fxmars

May 19, 2014

Posted by fxmars.com

EURUSD:

After breaking the symmetrical triangle from the middle of March in bearish direction, the price created a Double Top formation, which got confirmed on Thursday with crossing the neck line at 1.36714. This is the basic reason to believe that the price would basically decrease in longer term and it could even reach 1.34650. At the same time, in the last two weeks, the price did a significantly fast drop, which has been slowing down in the last few trading days after the price reached the red neck line at 1.36714. This hints that a correction might come soon. Furthermore, the stochastic oscillator signalizes for an eventual upcoming increase of the price. The most reasonable resistance to be met is the upper level of the already broken symmetrical triangle from the middle of March. The price might start the expected bearish movement afterwards.

USDJPY:

After breaking in bearish direction through the symmetrical triangle from the beginning of January, the Yen tested the already broken lower level of the formation as a resistance and bounced in bearish direction again, where it met the 5-times tested support at 101.197. Having in mind that the price broke in bearish direction the triangle, which is older and stronger, it is likely to see the price breaking through the 101.197 support too. If the price breaks through this support, there would not be any significant support to be met at least until 96.405, which is the level indicating the last significant bottom of the price on W1. If the price bounces from the 101.197 support, it would probably reach again the already broken level of the triangle and the 102.770 resistance afterwards.

GBPUSD:

The Cable reached 1.69970, which is now considered as a 5-years high for the price. As a result of the bearish divergence between the chart and the stochastic oscillator, a bearish drop occurred afterwards and the price reached again the lower level of the blue bullish corridor from September 2013. As we see, there is a clear bounce from the lower level of the corridor, which infers that a bigger bullish movement is about to appear. At the same time, with getting out of the 0-20 area, the stochastic oscillator gives a beautiful bullish signal, which supports the bullish scenario. The next resistance to be met is the purple level at 1.69970, which indicates the previous top of the price.

USDCHF:

With completing the smaller double bottom formation (blue) with bottoms from April 11 and May 8, the Swissy reached the 0.89486 resistance, which appears to be the neck line of another bigger double bottom formation (green) with bottoms from March 13 and May 8. The neck line got broken anyway, which infers a bullish increase, which could even push the price to the value of 0.91410. At the same time, the stochastic oscillator signalizes that the market is overbought and a decrease in the price might occur. For this reason, it is possible to see the price correcting to the 0.88618 neck line of the smaller blue double bottom formation and to test it as a support, before any upward movement.

AUDUSD:

After the Aussie created the impression that a head and shoulders formation might get confirmed, there was an interaction with the purple bullish trend line from the end of January, the price closed a dragonfly Doji candlestick and a bullish increase occurred. The price reached its previous top at 0.93787 afterwards. The top the price just formed could be lined with the 0.94580 top of the price from April 10, which creates the upper side of a symmetrical triangle. This means that the price is going to break through the triangle in bearish or in bullish direction. If the upper level of the triangle gets broken, the price would probably meet the 0.94580 resistance. If the lower level of the triangle gets broken, we might see the price testing the 0.92053 support again and we might speak again of a head and shoulders formation. We remind that the lower level of the triangle is older and many times tested, which makes it stronger than the upper level of the triangle.

XAUUSD:

After getting out of the triangle from the middle of March (red), the price is rather moving horizontally than in bullish or bearish direction. In other words, the gold is currently consolidating. The consolidation of the pair resembles a descending triangle (blue), which creation has started in the beginning of April, and it is likely to be broken through the lower level. Currently, the price is moving toward the lower level of the formation, which is horizontal and it is located at 1273.95. If the lower level of the formation gets broken, the price would most likely meet the already broken upper level of the red triangle and it would test it as a support. If the price breaks through the upper level of the formation it would have three more resistances on its way – the yellow resistance at 1307.01, which indicates the last three tops of the price, the purple 1316.29 resistance, which indicates the top of the candlewicks by the middle top and the already broken lower level of the red triangle.

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