Week Ahead 17Th August Technical Analysis From Fxmars

August 18, 2014

Posted by fxmars.com

EURUSD:

As we see, after the interaction with the support at 1.33231, the price has broken the orange bearish trend line from July 10. At the same time, we see that this happens after the creation of the light blue bullish divergence between the bottoms of the price and the stochastic oscillator. Furthermore, the stochastic oscillator has created an ascending triangle, which, as we all know, has the potential to break in both directions. Having in mind the signs, which we already discussed, we assume that the break is most likely to be in bullish direction through the upper level of the triangle. If this happens, we could use such signal for a trigger of a long position. This could bring the price to the already broken support at 1.35100 in order to be tested as a resistance.

USDJPY:

After the last decrease of the price, we witnessed a correction, which brought the price to the yellow bearish trend line from July 30 and the resistance at 102.700. The price bounced in bearish direction afterwards. At the same time, the stochastic oscillator interacted with the area of the overbought market and it is currently attempting a cross of its two lines, which gives us another bearish signal. For this reason, we believe that a new decrease of the price is likely to happen. This could bring the price to the many times tested support at 101.197.

GBPUSD:

The purple bearish corridor from July 15 has decreased the Cable to the support at 1.66552, which is the current location of the price. At the same time, the price is testing the lower level of the purple bearish corridor, which brings an additional support to the price. Moreover, we have the stochastic oscillator, which is currently in the area of the oversold market. Also, we see a hammer candle, which also speaks of an end of the bearish activity. In total, these are four bullish signals. For this reason, we believe that the price would increase to the upper level of the purple bearish corridor and having in mind the many bullish signals, we might also see a bullish break.

USDCHF:

After the break through the neck line at 0.90367, the Swissy has confirmed the small head and shoulders formation (green). At the same time, after it entered the area of the overbought market, the stochastic oscillator broke its blue bullish line in bearish direction and then it has tested it as a resistance, which supports the eventual bearish movement. We should not forget that in order to complete the head and shoulders formation, the price should go beyond the yellow bullish trend line from May 8. If a break in the yellow bullish trend line occurs, we might see the price reaching the support at 0.89485. If the price bounces from the yellow bullish trend line, the next resistance to be met is the last high of the price at 0.91181.

AUDUSD:

After the confirmation of the green head and shoulders formation, the price tested the already broken purple bearish trend line from April 10 as a support. The followed bounce brought the price to the already broken 0.93195 neck line of the head and shoulders formation in order to test it as a resistance. At the same time, the stochastic oscillator is about to enter the area of the overbought market, which would give us a bearish signal. Furthermore, the resistance at 0.93195 is expected to slow down the bullish movement of the price. After all, we should not forget that the price of the Aussie should at least reach the support at 0.92027 in order to consider the already confirmed head and shoulders formation as completed

XAUUSD:

After the bullish divergence between the bottoms of the price and the stochastic oscillator, the price did a bullish break through the orange-blue falling wedge formation. The price increased and the two tops after the break have confirmed the upper level of a bearish corridor from July 10. As we see, after the bullish potential of the wedge was completed, the price has bounced from this level, which speaks of an eventual decrease to the lower level of the corridor. At the same time, the stochastic oscillator got out of the area for an overbought market and it is currently supporting the eventual decrease of the price, which could reach either the already broken upper level of the wedge as a support, or the support at 1268.56, or the both level at once.

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