EURUSD
EURUSD has played out perfectly as I forecasted. After an impressive breakout of the multiyear wedge we have talked about for weeks. That break out is still very valid although the month of august is not over yet. I say this because of the past two week’s price action on the weekly and daily time frames.
Let’s start with the daily, the past two sessions formed a continuation inside bar, the bars bounced off 1.17087 nicely. On the daily we have a range bound consolidation between 1.1900 followed 1.17087, also the 10 and 20 EMA dynamic support continues to hold the pair.
Here is my outlook for the week to come. Unless the monthly breakout turns out to be false, I think that this is a buy buy situation. We might see a break down to retest the wedge top at 1.16612. So am only interested in buying the dips or a breakout from 1.1900. Remember there are no guarantees, key resistance on the way up include 1.21572, 1.2350 and 1.2520.
Alternatively only a break back into the wedge will negate my bullish stand.
EURUSD weekly time frame
EURUSD weekly time frame
GBPUSD
GBPUSD has also trilled buyers with its rally after it broke from 1.26241 confluence of resistance.
Currently the cable is facing another tough confluence of resistance (a trend line that dates back to 2018 and horizontal resistance) 1.314/1.316, the cable has consolidated for two weeks, continuously pressuring the resistance but never touched 1.2960.
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On the weekly time frame, there is an inside bar from last week signaling a possible continuation. A daily close above 1.31629/1.31630 will expose 1.350 followed by 1.3730.
Alternatively a close below 1.29513 will expose 1.2800
GBPUSD daily time frame
GBPUSD weekly time frame
USDMXN
Us dollar vs the Mexican peso (USDMXN) has been in an uptrend dating back to 2005 and have since rallied an impressive 15,963 pips. April indicated some weakness and a possible correctional move with the formation of a massive bearish pin bar on the monthly time frame. USDMXN has since then sold off 3,554 pips.
Moving to the daily time frame the bearish pin bar formed a wedge which broke down on the 19th of May 2020 and sold off 2,300 pips since then. Fast forward to today, USDMXN just came to end of a consolidation. The short term rising channel (bear flag) broke with Fridays close, breaking through confluence of support 21.990 and 22.144.
Given the 15 year rally, which by the way has no significant pull back yet, I will not be surprised to see the pair drop down to 17.390, just beyond 50% Fibonacci retracement of the entire rally. The potential bull flag also supports my views.
On the way down key support comes in at 21.4112, 20.1285 and finally 17.390.
Alternatively if we get a close above the top of channel that will negate this entire idea.
USDMXN daily time frame
USDMXN monthly time frame instead
GBPNZD
The last time I wrote about GBPNZD, I discussed the possibility of a break out from the multiyear channel that however did not happen, instead the pair formed a bullish engulfing candle and rallied.
Today I want to talk about this rally and what we should expect. Given the momentum and the overall strength of the pound, I think we might see it retest channel top.
Price stopped at 2.000 resistance, notice that this level played a vital role in October.
2.000 in my opinion is a vital level for buyers to break, to be able to extend this rally. A close above it on a daily basis will expose 2.0533 followed by 2.103. We should remember the trend line which broke down in May that precipitated the last sell off. This line of resistance will be a factor if the pair rallies fast enough.
Alternatively, should we get a sell signal from 2.000, that might keep the pair under pressure.
GBPNZD daily
Written by:
Chijioke Maduakor
