I’d like to share Abe Cofnas’ outlook for the week ahead in FX. Abe has been trading FX and teaching other how to trade for years and I think you’ll find his insight valuable.
The Majors are at the start of the week providing some challenges as some are testing key Resistance and Support levels. Let’s scan the market using basic Resistance and Support. Support and Resistance tell us a lot about the battle between buyers and sellers. Keep in mind that a currency pair, when at a key resistance or support line is there for a “reason”. The currency pair reacts to sentiment about the underlying economy and prospects for growth, or inflation. This means that the day chart points to barriers that are quite important. Failure to penetrate Day Resistance or Support are major selling or buying signals. Let’s get started:
USDCHF
This pair is an inverse image of the EURUSD. Recent severe weakness in the US Dollar shows up here. This week the currency pair could test Support if bad economic news continues. The range is wide and there is a lot of intra day trading in between.
USDCAD
The Loonie is looking strong and may test 1.0150 this week. The best strategy is to sell on retracement failures up on the 4 Hour charts.
EURUSD - CHALLENGE TO THE BULL SURGE
We see a clear technical challenge facing the EURUSD as it hit’s a 61.8% FIB LINE. The outlook is very cautious and traders need to see the EURUSD confirm a breakout above or a failure to sustain this level is a good sell point.
AUDUSD - SOARING BUT MAY GET TIRED
The technicals are stunning and very bullish. But joining the upside here requires caution and expect a pull back and then buy on a resumption of the move up - after the pullback.
USDJPY - TEST OF SUPPORT AT 86.00
Trading the USDJPY this week will be quite challenging because in play is test of Support. There is inner support at 86.24 and Outer Support at 85.94 Bulls and Bears are very balanced. Waiting for a breakout is a better strategy.
GBPUSD - NEARLY PARABOLIC
The Pound Sterling is nearly parabolic in its price action. This doesn’t mean that a selling opportunity is ahead. Instead, traders should expect a pullback- but it’s not a good idea to go against the strong sentiment here.
I wish you much success in your trading!
Abe
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