A look at a few pairs of not this week. Since the FOMC & Bank of Japan news last week, we have seen some large moves in most pairs involving the USD and JPY. Will the dollar continue its run? Will the Yen continue to slide?
Weekly trading on the GBP/USD has fallen down under the 200MA now and has started to more downside pressure with the rapid rise in the USD since last weeks FOMC meeting. Should down side pressure continue, GBP/USD could see price test to the previous daily low in at 1.5925 and with a break of support there could look to test deeper support in the 1.5750 area.
AUD/USD has just seen a break of a Bear Flag on a daily chart. Again with the large upside on the Dollar Index this pair is suffering as well and could see the test of the previous low at 0.8640. If the 0.8640 area doesn’t hold, this pair could see more downside to the tune of 400 – 500 pips. Monthly support shows a possible 0.8100 target should the selling continue.
Both of these pairs have seen substantial downside in the last few months. However looking at them against each other we can see an Inverse H&S pattern formed on the daily. Should this pattern play out we could see an opportunity to take the Euro long against the AUD. Especially if the AUD/USD breaks support and starts a long term decline towards the monthly support in the 0.8100 area as I mentioned above. However with the Euro under wide pressure as well, it may just be a matter of the biggest loser contest here.
USD/JPY has seen quite the move recently as well. With the USD strength and the announcement of BOJ with more buying of equities the JPY has seen a sell off across the board. As my 114.000 target that I wrote about a couple months back has now been hit, I am looking for a further move into the 116-118.000 area, with a long term extreme high target in the 123-124.000 area over coming months.
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