Week Ahead 27Th July Technical Analysis From Fxmars

July 29, 2014

Posted by fxmars.com

EURUSD:

After creating its last top, the price let us draw a bearish corridor (yellow), which set its beginning on April 22. After its last bounce from the upper level of the corridor, the followed bearish movement brought the price through the 1.35100 resistance, which indicates the bottom from June 12 and through the purple bullish trend line from July 2012. This created the idea of an eventual continuation of the bearish movement and the eventual creation of new lows. After all, we remind that currently the price is on an 8-months low. At the same time, the stochastic oscillator gives very clear signals for an oversold market, which creates the idea that an eventual correction to the upper level of the yellow bearish corridor might appear during the upcoming week.

USDJPY:

After its last interaction with the 101.197 support, the price started increasing and it confirmed a double bottom formation (green), with interrupting its red neck line. At the same time, the stochastic oscillator confirmed a double bottom formation too and it entered the area of the oversold market afterwards. For this reason, we believe that the price might do a correction before starting moving after the already confirmed double bottom formation. The price might reach the purple bearish line from the end of December 2013, or even the many times tested green resistance at 102.770. Anyway, the overall potential movement of the price is likely to be bullish.

GBPUSD:

After reaching the resistance at 1.71849, which indicates the 70-months high of the price, the Cable started decreasing and again it got out of the frames of the blue bullish corridor from September 2013. This makes us believe that the bullish intensity of the price has started decreasing and the price attempts to increase outside of the regular frames of the corridor. For this reason, we have connected the last two crucial bottoms of the price with a yellow bullish line, which we would take as a support in case of an eventual interaction of the price with it. On the other hand, the stochastic oscillator has just entered the area of the oversold market and its two lines might interact on Monday, if the price starts slowing down. Are we going to see a change in the direction of the price before an interaction with the yellow bullish line?

USDCHF:

After the Swissy confirmed its double bottom formation with bottoms from July 1 and July 14, the price continued its bullish increase and it even broke the last high of the price at 0.90367. We note that the recent bullish activity of the price was highly intensive and we assume that the time for a bearish correction might have come. At the same time, the stochastic oscillator is pretty explicit about the current condition of the market, because it gives us a clear signal for an overbought market. For this reason, we believe that the price might do a bearish correction, which could reach the support at 0.89486, or the yellow bullish trend line from March 13.

AUDUSD:

After the stochastic oscillator confirmed its double bottom formation, the price increased with about 70 pips and the Aussie interrupted the 0.94347 resistance. This could be interpreted as an indication for a continuation of the bullish activity (yellow bullish trend from May 21). Currently, the price shows some bearish activity, which would eventually reach the yellow bullish trend line for a test. At the same time, the stochastic oscillator gave us a signal for an overbought market, which supports the return to the yellow bullish trend. An eventual bounce from this trend is likely to send the price to its last high at 0.95070 and a bullish break could even appear.

XAUUSD:

There was a bearish break in the yellow bullish trend line from June 03 on Thursday. We remind that we got a signal for an eventual break via the bearish divergence between the stochastic oscillator and the chart. After the break in the yellow bullish trend, the price did a return to test the already broken trend as a resistance on Friday. Currently, the price is located on the underside of the trend line. If a bearish bounce appears, the price is likely to test the red support, which indicates the last bottom of the price after the break. If this happens, we would observe a potential change of the trend scenario. If the price renews its bullish activity, we would have the 1331.38 resistance as a neck line of a formation, which resembles inverted head and shoulders (green). This formation has the potential to send the price to new highs.

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