EURUSD, Daily timeframe
Bias: Pair in Uptrend
On Friday, we saw a second day of positive price action with the pair advancing about 30 pips. Traders will have a better idea if there is a stable price recovery to come by the levels in near sight and the way price reacts from them.
The pair could test the immediate resistance at 1.1700. If the level is respected, this could mean that price reaches the area and then potentially drops south again. If the day closes below 1.1700, this could mean short-term bearishness for the pair. Levels of support below are 1.1500 and 1.1300.
We could witness price breaking out and pushing above the resistance at 1.1700. If this price movement takes place, then we could have the uptrend resume it’s natural course of action heading toward 1.1900 and 1.2065 target levels.
If price exhibits lack of clarity, this will be in the form of a sideways movement.
GBPUSD, Daily timeframe
Bias: Pair in Uptrend
The week concluded with bullishness for the major pair. The distance travelled above the pivotal support at 1.3050 was about 120 pips up. So, what’s next?
We could have another week of movement within the context of the range located between 1.3050 and the resistance at 1.3300. Now, due to last week’s price action, there is a mild (120 –pip) bullish bias. We could see price zig zag its way toward the upper band of the range at 1.3300.
Now, if price breaks out to either way of the range and more importantly closes the day significantly outside its boundaries, we would know if the trend is in retracement mode or recuperating. A closure above 1.3300 would suggest more bullishness coming in. Target above is toward the 1.3650 area.
A closure below 1.3050 would potentially influence further bearishness. Levels to watch out for are the immediate support levels at 1.2800 and the more distant one at 1.2618. Those are levels that could supply potentially entry points on the long side, provided there is a trigger. A valid trigger would be a bullish rejection pushing away from those levels and signaling that price doesn’t want to go there.
AUDUSD, Daily Timeframe
The Aussie is still in undecided in its direction. If you take a look at the daily timeframe, would see eleven days of sideways movement. This is exactly the type of price action that is most difficult to capitalize on. That’s the reason why we’re looking for high-probability high return trading opportunities that will make the waiting worthwhile. The developments we’re watching are:
We could see the pair going for yet another retest of the near- distance resistance at 0.7750. This level has provided a barrier for price twice before (see arrows pointing to Daily candles pushed back down). We would know if price simply reaches the area and then closes the day way below 0.7750. Levels of support are located at 0.7600 and 0.7505.
It is also possible that price could break above 0.7750. If the day closes above that level, this could mean that the uptrend is in continuation and we could go long with it. Targets above are 0.7900 and 0.8066.
Price could also continue to move up and down (i.e. consolidate) on daily timeframe. Unless, you’re a very short-term trader who specializes in ranging markets, this is not a scenario we’d be looking to trade.
Bias: Uptrend (currently consolidating)
On Friday, the pair made a surprising move into negative territory. The drop was to the amount of about 100 pips. It’s definitely worth asking the question, “Where is the market going?”
Now, we could see a retest if the immediate support at 1260.70. We had a bearish engulfment candle formation on Friday, so this move could play itself out. If price respects the support, we would see another bullish candle formation. Mind you that it’s important to have a more substantial price movement. Better await the week to close with a conclusive price action than diddle around with choppy price action.
There is something interesting about the way the week closed. If you turn to the larger weekly timeframe, you will notice that the tail of the candle is long but we have the week close above its opening price. This is indeed interesting and important.
It could mean that price doesn’t want to go further down. If, indeed, this is the case, we could see price advancing and recovering from Friday’s negative price action. Better await a day or two for the much needed clarity and confirmation. Targets above are located at 1300.34 and 1350.00
If price closes below the support at 1260.70, no long trades should be initiated. Bias would weight toward south.
Wishing you happy and successful trading!
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