Week Ahead 20Th July Technical Analysis From Fxmars

July 21, 2014

Posted by fxmars.com

EURUSD:

During the last week, the price was moving in bearish direction and on Thursday it reached the 1.35100 support, which matches with the purple bullish line from July 2012. The interesting is that the other two bottoms, which lie on the purple bullish line, are from July 2012 and July 2013. Currently, it is July 2014 and the price attempts a third bottom on the purple bullish line and at the same time, the price is testing the support at 1.35100. This gives additional strength to the level and it is likely to believe that an increase in the price might occur. At the same time, the stochastic oscillator is in the area for an oversold market and the two lines are just crossing in bullish direction. For this reason, we believe that a bullish bounce and a new bullish increase would be the typical scenario in this case.

USDJPY:

The price reached again the 101.197 support on Thursday and it bounced in bullish direction on Friday. We remind that his is a strong support, which has stood the pressure of the price for about 8 times. We also remind that sometimes, the price breaks the 101.197 support and decreases to the next support at 100.756. In this manner we mention, that the stochastic oscillator’s behavior is not very bullish and such decrease might occur. On the other hand, if a bullish increase occurs, the price would eventually meet as a resistance the purple bearish line from January 2 and eventually the 102.770 resistance.

GBPUSD:

During its last consolidation after creating a high at 1.71849, the price reached as a support the lower level of the blue bullish corridor from the end of September 2013. Currently, the price demonstrates a decrease of its bearish intensity after meeting the corridor as a support, which creates the idea of an eventual bullish movement. But, if we take a closer look, we notice that there is an obvious divergence between the bottoms of the chart of the Cable and the stochastic oscillator, which speaks of the opposite scenario. Furthermore, the two lines of the stochastic are acting pretty strange lately and there isn’t any bullish signal from it. If the price increases, it would eventually meet the 1.71849 level as a resistance again. A break in the lower level of the blue bullish corridor might drop the price to 1.68377.

USDCHF:

After breaking the blue bearish trend line from June 5 and testing it as a support afterwards, it looks like the Swissy is aiming for the level of 0.90367, which indicates the beginning of the blue bearish trend. The resistance at 0.89486 was easily overpowered and the price continued its bullish movement. On Thursday the price closed a bearish candle, which indicates that the bears are not out of the game. Furthermore, the stochastic oscillator has entered the area of an overbought market and it is now attempting a cross of its lines, which would give us a bearish signal. For this reason, we believe that the price might test the already broken resistance at 0.89486 as a support, which could be the expected correction of the bullish movement.

AUDUSD:

After reaching the 0.93196 support for third time, the price bounced in bullish direction and now it looks like the Aussie is heading for the resistance at 0.94347. At the same time, the stochastic oscillator forms a double bottom formation, which is about to get confirmed with a break in the neck line (red). The formation is visible on the chart too, but it is not as clear as on the stochastic oscillator. In this case it is likely the break in the neck line of the stochastic to happen at the same time with the eventual break in the 0.94347 resistance. In such scenario, the price would eventually strike for the top at 0.95000 and could even reach new high.

XAUUSD:

With bouncing again from the orange bullish line from June 3, the price of the gold confirmed the line to be a bullish trend. With the bounce from the orange bullish trend line, the stochastic oscillator did a rapid break out of the area, which signalizes for an oversold market and this confirmed the potential bullish movement. For this reason, we believe that the price would eventually reach the 1331.38 resistance again. Having in mind that during its last interaction with this resistance the price did a bullish break (red circle) and it was above 1331.38 for couple of days, we believe that a new break in this level might occur. In such case, the price could even reach the already broken purple bullish trend line from January 5, as a resistance.

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