We look at the current economic calendar to see whatโs driving the markets, as well as the price charts of some major pairs
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- EUR/USD has been in a sideways pattern since August 2020. A key level in that pattern, 1.1957, was tested as resistance and support multiple times. The price is currently above the level after breaking through it decisively, so we are bullish EUR/USD.
- GBP/USD has been a in long-term uptrend since 2019 but in recent months has been moving sideways. We have identified 1.3759 as a prior resistance, and the price is now showing bullish action in the last few days and trading above that level. However, on the 4-hour chart, price has stalled at a short-term resistance of 1.4005. We would like to see price settle above this level before being bullish.
- USD/CHF has been trending down since the beginning of April 2021 and has broken through a previous support at 0.9213 and looks set to continue the downtrend.
- NZD/USD recently tested a long-term resistance level at 0.6943 made in 2019, except now it tested it as a support level over March & April 2021. NZD/USD is also trading above a previous support made at 0.71043, seen on the 4-hour chart. We are bullish NZD/USD.
- AUD/USD looks to have a failed head & shoulders pattern with a neckline around 0.7581. We are bullish AUD/USD.
- USD/CAD is in a downtrend, but itโs a very volatile trend with hard-to-find entry points.
- USD/JPY has been trending down since the beginning of April 2021 and broke through a previous support at 108.45 and subsequently tested it as a resistance. The downtrend looks set to continue.
The first thing I recommend doing when conducting a weekly market analysis is looking at the economic calendar. While I donโt interpret the economic data or rely too heavily on them for my trade executions, itโs important to note that economic announcements add liquidity to the markets and help drive trends. Once youโve looked at the economic calendar, you can better understand the market outlook and then look at price charts to figure out where to enter your trades.
Letโs look at this weekโs economic calendar:
Letโs begin our market analysis by taking a look at the daily chart for the EUR/USD currency pair:
The EUR/USD has been in a bit of an uptrend. I marked the key level at 1.1957 where the price stalled back in August of 2020, then decisively broke through it as you can see on the chart. The price then came down to touch the level, and I thought the level was going to hold. However, the price stalled, had a bit of a downtrend since March, and has now reversed above that key level, which is whyIโm bullish EUR/USD.
Letโs look at that same level on the 4-hour chart:
You can see how decisive the price was in breaking above the level firmly, which explains my bullish stance.
Now letโs look at the daily chart for the GBP/USD:
The GBP/USD has been in an uptrend for a long time. The price squeezed around the level I marked, then popped up above it and retraced downwards. It didnโt quite hold at that level, but it made a nice double bottom.
Iโve marked that double bottom in purple on the 4-hour chart:
The price hit a resistance level recently and has retraced downwards. However, I wouldnโt get long of this pair until it reaches another 30-50 pips downwards to the grey box Iโve marked. SoIโm bullish the GBP/USD, but I want to see it establish that base first before I jump in.
The USD/CHF is a very interesting pair, which weโll analyze using the 4-hour chart:
Iโve marked a grey box where the price made a support out of that key level and, after making a higher high, came down and broke through that support level. Whatโs interesting is that the price then came back up to test the level as resistance, which I think confirms that the pair is in a downtrend. The pair seems to be making a corrective move higher, but I think weโre due for another leg down, soIโm bearish USD/CHF.
Letโs now look at the weekly chart for the NZD/USD:
Iโm showing you the weekly chart so you can see how the pair has really bounced against a key level. The price first touched the level back in late 2018-early 2019, then pushed down until March 2020, made a bottom, and has been trending upwards ever since. It broke through the resistance level and retraced down to test the resistance as support quite cleanly. This really confirms the uptrend, soIโm bullish NZD/USD.
However, it gets a bit messy when you zoom in to the 4-hour chart:
The upper yellow line is where Iโve marked the support level that was made on the 4-hour timeframe. You can see how the price fell through it to test the previous resistance level we saw on the weekly chart as support, then broke above the previous support level.
Zooming further in to the hourly chart, I think we can find an entry:
If the price stalls around the area Iโve marked with a grey box, I think that would be a nice bullish trade to enter.
Letโs look at the daily chart for the AUD/USD pair, where Iโve marked a key level:
I see that the price formed a head and shoulders pattern above the level marked by a yellow line, but as it never actually broke through that level, itโs a failed pattern. So because it had a chance to reverse and didnโt, it confirms the bullish trend. This pair may not be as strongly bullish as the NZD/USD, butIโm still generally bullish the AUD/USD.
Now letโs see the 4-hour chart for the USD/CAD:
The pair is in a long-term downtrend, but that trend is quite messy and hard to get into. The last trade I saw (though I missed it) is marked by the yellow line. It made a resistance and then a clean pin-bar reversal against the resistance. I think there as a good entry there, before the price pushed down. But because the trend is so volatile, with such large retraces, I find it difficult to easily spot trades in this pair. Using moving averages or RSIs to help you identify entries might be a good idea. In the meantime,Iโm bearish USD/CAD.
Lastly, letโs look at the USD/JPY, which is looking interestingly bearish:
This head and shoulders pattern may not be as clean as that of the AUD/USD, but it did breach the neckline. As it was trending down, I thought it would stall at the support level and go back up. Instead, it shot right through it, then made a bullish candle to come back up to test the support level as resistance and sold off immediately. Therefore,Iโm bearish USD/JPY.
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