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Here’s the market outlook for the week:
EURUSD
Dominant bias: Bullish
The EURUSD moved upwards 230 pips last week – an action that has resulted in a Bullish Confirmation Pattern in the 4-hour chart. The resistance line at 1.1450 has been tested and it would be breached to the upside, as price targets other resistance lines at 1.1500 and 1.1550. However, the month of May 2016 would be challenging for bulls because EUR would be weak in some cases. There is an exception of course, like EURAUD, because AUD would be weak against other currencies in May.
USDCHF
Dominant bias: Bearish
This pair merely went in the opposite direction to EURUSD. Price dropped 220 pips and later closed below the resistance level at 0.9600. There is now a bearish outlook on the market and further southwards movement is possible this week, Bears might push the pair towards the support lines at 0.9550 and 0.9500. There cannot be a reversal of this bearish movement unless there is a serious weakness in EURUSD.
GBPUSD
Dominant bias: Bullish
GBPUSD was able to rally gradually last week, reaching the distribution territory at 1.4650. Bulls fought desperately at the distribution territory at 1.4600; only to meet another strong opposition at the distribution territory at 1.4650. Bulls should be able to overcome the opposition at this distribution territory, owing to the bullish outlook on GBPUSD (and most other GBP pairs like GBPAUD and GBPNZD) for the month of May 2016. Price would move up further by 200 pips this week.
USDJPY
Dominant bias: Bearish
This currency trading instrument went sideways from Monday to Wednesday, and then dropped like a stone on Thursday. Price dropped by 500 pips, closing below the supply level at 106.50. There has been a bearish signal in the market, including other JPY pairs. This bearish movement is supposed to continue this week as price action is characterized by lower highs and lower lows. Short-term rallies can be taken as short-selling opportunities.
EURJPY
Dominant bias: Bearish
Just as it was mentioned in the last forecast, EURJPY cross first trudged upwards from April 25 to 27, and then plummeted. The drop was significant enough to overturn the recent bullish gains, causing a Bearish Confirmation Pattern to form in the market. Price has gone below the supply zones at 124.00, 123.00 and 122.00, reaching out for the demand zones beneath them. The outlook on JPY pairs is bearish for the month of May. Therefore, long trades do not make sense here until there is a strong bullish reversal in the market: something that may take place before the end of May.
This forecast is concluded with the quote below:
“The goal of a successful trader is to make the best trades. Money is secondary.” – Dr. Alexander Elder
Source: www.tallinex.com
