Monday 27th April: Weekly technical outlook and review (New Zealand bank holiday today)

EURUSD:

Weekly view: Overall, the weekly timeframe still shows that the Euro is trending south, and has been for nearly a year now. Despite this, the weekly demand area seen at 1.0333-1.0502 has been able to support this market since mid-March. Last week’s trading did see a slight advance, but not really anything to get excited about since it has not really changed the overall structure of this timeframe. The outlook for this pair is still south in our opinion and will only change once/if a convincing push above weekly supply at 1.1449-1.1278 is seen.

Daily view: From the daily scale, we can see that price closed for the week (1.0865) just a stone’s throw away from a significant daily resistance zone at 1.1051-1.0918. This daily zone has managed to hold price lower on two occasions (26/03/15 – 06/04/15), therefore is an area that needs to be respected. Let’s see what the 4hr timeframe has to offer.

4hr view: The 1.0800 psychological number was clearly significant support for Friday’s sessions, which consequently saw prices whipsaw between this level and the 1.0900 hurdle above.

Today, and possibly into tomorrow will likely see further buying of the Euro currency. We believe this buying pressure will eventually break above 1.0900 to the 4hr supply area coming in at 1.0953-1.0922. This 4hr supply zone is extremely confluent in our opinion and is somewhere that we are very keen to look for confirmed shorting opportunities this week.

Reasons for considering a sell trade at the aforementioned 4hr supply area are as follows:

• The round number 1.0900 will likely contain a ton of buy stops just above, from traders attempting to both fade and buy the breakout. Therefore, from a liquidity perspective – there will be plenty of buy orders available for well-funded traders to sell into.

• Clean/fresh 4hr supply at 1.0953-1.0922.

• Harmonic Gartley reversal zone – the 0.786 retracement positioned at the lower pink line at 1.0916, and the AB=CD completion located above at the upper pink line – 1.0985.
• And finally, let’s not forget that this 4hr supply area is located within the aforementioned daily resistance zone.

The only grumble we have regarding the aforementioned 4hr supply zone is the buying pressure from the weekly demand area (see above) may push prices higher than expected, other than this, we believe this to be an A+ shorting setup. Targets will be different trader-to-trader, for us however, we’ll first be looking at 1.0900, once/if we manage to get below here, we’ll then look to 1.0800 as a first take-profit target.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 1.0953-1.0922 [Tentative – confirmation required] (Predicative stop-loss orders seen at: depends on where one confirms this area).

GBP/USD:

Weekly view: Last week was clearly a great one for anyone long this pair, price rallied a cool 230 pips with the market seen closing on its highs at 1.5184.This advance has very likely opened the gates for prices to challenge the weekly supply area seen above at 1.5551-1.5391. With that being said, Cable still remains in a downtrend at the moment, so for anyone considering buying this pair long or even medium-term will need to bear this in mind.

Daily view: Following the pin-bar retest of the aforementioned weekly swap level on Thursday, a clear advance in price took place on Friday. Consequent to this, price closed above the high 1.5164 and terminated just below a daily swap area coming in at 1.5298-1.5208. This zone, in our opinion, is likely going to be a key obstacle to a move towards the aforementioned weekly supply area this week.

4hr view: The recent buying seen on this pair saw the market engulf not only the round number 1.5100, but also the 4hr Quasimodo resistance level seen at 1.5136, which, as you can see, saw the market finally close for the week just below a 4hr supply area at 1.5222-1.5189.

Although on the weekly scale, we’re seeing a clear run up to weekly supply, the daily and 4hr charts tell a different story entirely as both are now nibbling at the lower limits of supply (see above). With this in mind, it’s very difficult for us to even guess at where the GBP is headed next. A reaction from the 4hr supply area just mentioned above could indeed take place, if so; all eyes will be on the recently consumed 4hr Quasimodo line 1.5136 to hold as support. On the flip side, a convincing push above this 4hr supply zone would need to hold as demand for us to be convinced a move higher will follow. Nevertheless, some of our team still hold reservations here since even with a close above and retest of this 4hr zone, it does not necessarily mean price is going to advance, since at that point we’ll be firmly located in the heart of the daily swap area mentioned above at 1.5298-1.5208.

Therefore, in the absence of clearer price action, our team has decided to remain flat and watch how price behaves today before considering potential trading opportunities.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

AUD/USD:

Weekly view: From a weekly timeframe perspective, very little has changed over the past three months. The overall trend clearly still remains southbound, and the buyers and sellers continue to battle for position around a weekly demand area seen at 0.7449-0.7678.

Daily view: The daily timeframe shows that the daily swap level 0.7691 managed to provide support to the market from Tuesday onwards last week. Consequent to this, price closed the week (0.7814) attacking the 0.7841 region (17/04/15). If the buyers are successful this week in breaking above this high, the route north will highly likely be clear for a further advance up to the upper range boundary seen at 0.7875.

4hr view: Friday’s trading action saw the Aussie pair firmly close itself above the 0.7800 mark. However, before we all go hitting the buy buttons, we may have to contend with selling pressure from the high 0.7841 just mentioned above in our daily view.

Taking all of the above into account, we feel there’s a good chance the market will likely retest the 0.7800 barrier today. That being said, traders should be prepared for the possibility that this level may be faked lower down into the 4hr demand area coming in at 0.7763-0.7788 before we see any real buying pressure, if any. It would be at this point, we’d begin watching for lower timeframe buying strength to present itself. If it does, our team would consider an intraday buy position up to the 0.7850 mark.

Notice that the price action on the 4hr Aussie chart here is very similar to that of the Euro 4hr chart (see above). That being the case, should price reach the 0.7850 level this week, this will be where we shift into ‘short mode’. This number, along with other confluent factors gives us reason to believe this is where the 4hr minor uptrend will likely terminate and bears will take over. A short trade from this number is being considered for the following reasons:

• Fresh 4hr supply (seen in green) coming in at 0.7883-0.7852, which coincides beautifully with a potential Bat Harmonic reversal zone (0.7850/0.7889).
• The overall trend still remains southbound. Granted, price is still trading around weekly demand (see above) but with the way price has been behaving around this area the past few months does not exactly inspire buying confidence.
• The 4hr supply zone also has additional resistive pressure from a daily swap level coming in at 0.7875.

Targets for any shorts here will be totally dependent on how price approaches this 4hr reversal zone.

Current buy/sell orders:

• Buy orders: 0.7800 region [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: 0.7850/0.7889 [Tentative – confirmation required] (Predicative stop-loss orders seen at: Stops will likely be placed above the 0.7900 round number).

USD/JPY:

Weekly view: For the past month or so, the buyers and sellers have been seen battling for position within a weekly demand area coming in at 118.22-119.40. Last week’s candle clearly showed that the bears overwhelmed the bulls within this zone, but as you can see, this was still not enough to close prices below the prior week’s low 118.56. Therefore, despite the disappointing performance seen from the buyers last week, our bias will remain north on this pair as long as price continues to hold within this weekly demand zone.

Daily view: From the daily scale, we can see that prices closed the week just above a daily trendline extended from the low 115.55, which also boasts additional supportive confluence from daily support coming in just below it at 118.62 (located deep within the aforementioned weekly demand area).

4hr view: Friday’s sell off that smashed through the 119.00 handle has helped complete what we believe the Harmonic technical community labels a Gartley bullish pattern. This, in our opinion could not have formed in a better place. The yellow zone depicts 4hr harmonic support – 0.786 XA retracement, an AB=CD equivalent pattern with beautiful market symmetry and a BC projection which complements the zone at 1.618. This supportive base, coupled with the fact that price is trading not only within weekly demand, but also around a daily support with a converging trendline (see above) makes this an incredibly confluent area of support in which to look for buy trades today/this week. If one is considering entering at market here, stops would be best placed below the X point 118.52. However, for us personally, lower timeframe confirming price action will still be required here. The reasons for why are simply because we have potential round-number resistance looming just above at 119.00. Therefore, waiting for the lower timeframes to confirm that buying interest exists here is, in our opinion, the best path to take.

Current buy/sell orders:

• Buy orders: 118.87/118.52 [Tentative – confirmation required] (Predicative stop-loss orders seen at: Ideally below 118.52).

• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/CAD:

Weekly view: (slightly revised from the previous) Last week saw the selling momentum subside in comparison to the prior week’s action. This slowdown consequently formed a weekly indecision candle at the closing price of 1.2179 within a weekly swap area coming in at 1.2265-1.2092. In the event that the bears regain strength this week and close price below this zone, the path south will then likely be clear towards a weekly swap level seen at 1.1814.

Daily view: From a daily perspective, we can see a rebound took place from just above the daily swap level seen at 1.2086 (located just below the weekly swap area mentioned above) on Friday. Should further buying be seen from here this week, it’s very likely we’ll be seeing price challenge the small daily supply area at 1.2326-1.2279 once again.

4hr view: The 4hr timeframe clearly shows price reacting from a 4hr demand area positioned beautifully on top of the aforementioned daily swap level at 1.2860-1.2129 on Friday. Nevertheless, as you can probably already see, price rallied from here directly into the jaws of a 4hr swap area visible at 1.2179-1.2205. As a result, buying may not be the best course of action today, no matter where price is located on the higher-timeframe picture (see above). On the other hand, shorting this pair around the 4hr swap zone is just as risky in our opinion, since you’d effectively then be selling to higher-timeframe buying opposition. Therefore, to be on the safe side, remaining flat at least for today seems to be the best position for us to take.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/CHF:

Weekly view: Last week’s candle shows us that the sellers were clearly in control of this market into the close 0.9531. This candle potentially highlights weakness around the weekly support level that’s been forming over the past month. That being the case, should a convincing close below this number be seen this week, this will very likely free the path south down towards a weekly demand area seen at 0.9170-0.9343.

Daily view: The daily timeframe shows that a consolidation zone is currently being chiseled out on top of the aforementioned weekly support level. Upper limits are seen in the form of a daily supply area at 0.9904-0.9771; the lower limits represent a daily demand area coming in at 0.9449-0.9545. The recent selling has, as you can see, placed price action firmly within the lower limits of this zone, so for anyone considering shorting this pair today, you may want to take a note of this.

4hr view: For anyone who read Friday’s report on this pair, you may recall us mentioning that we had taken a position long (0.9543) around the top-side of the 4hr demand area coming in at 0.9499-0.9541. This position is still live even with Friday’s lackluster performance.

Our overall bias for this pair remains long due to where price is located on the higher-timeframe picture (see above) at the moment. Granted, we are seeing price weakness above the weekly support level, but saying that price will break below this level because of this is no more than a guess in our opinion. We firmly believe in trading what we SEE, not what we THINK.

Assuming that our long position trades in our favor this week, we’ll be closely watching the 0.9600 round number level first and foremost. If price action turns bearish here, we’ll consider liquidating 50% of our position, and moving the stop to breakeven.

Current buy/sell orders:

• Buy orders: 0.9543 [Live] (Predicative stop-loss orders seen at: 0.9492).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

US 30:

Weekly view: Although the overall trend has been strong since early 2009, a temporary ‘ceiling’ to this index formed around the 18098 region four months ago. Last week’s candle closed two points below this barrier at 18087, and in our humble opinion looks ready to breakout north. It will be interesting to see what the lower timeframes have to say on the matter…

Daily view: Since the beginning of last week right through to Friday’s close, the buyers were seen holding firm at daily supply coming in at 18207-18117. This could suggest that the bears are weakening and the bulls are preparing to push higher. In the event that the sellers do wake up this week, however, the most we see prices falling to is the the daily trendline support extended from the low 17033.

4hr view: As mentioned in the previous analysis, the DOW has been forming what we believe to be a long-term 4hr bullish pennant (upper trendline extends from the 18279 high, while the lower was drawn from 17556). Price action spent most of Friday’s sessions teasing the upper limits of this 4hr pennant formation, which as you can probably see, was supported by the 4hr swap area just below it at 18053-18023.

We’re at a critical juncture on this index in our opinion. A close above this 4hr pennant formation and its converging 4hr resistance 18110 would likely suggest that the bulls are gaining further strength in this market. Consequent to seeing a close higher, the runway north would then likely be clear all the way up to 4hr supply seen at 18279-18250. The reason being is simply because to the left, we see very little active supply left in this market. Check out the very obvious supply consumption wicks that form our upper limit trendline: 18149/18161/18167. Therefore, with this in mind, a close above this upper trendline and 4hr resistance at 18110 would, in effect, be our cue to begin watching for price to retest this barrier as support.

Conversely, should the DOW sell off this week and take out the aforementioned 4hr swap area, intraday shorts may be possible if price retest this zone as supply. Personally though, we would not be comfortable shorting this retest due to what the higher timeframe structure is telling us at the moment (see above). For anyone that is, however, keep a close eye on the 4hr demand area below at 17898-17949, this could be a nice first-take-profit area.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

XAU/USD (Gold):

Weekly view: Overall, the weekly trend on Gold is still firmly pointing south in our opinion. With that in mind, last week’s action saw Gold sell off from weekly supply at 1223.1-1202.6, consequently forcing the market to close near its lows at 1178.9. Should further selling take place this week, price will likely cross swords with weekly demand coming in at 1130.1-1168.6.

Daily view: From this angle, we can see that this market heavily sold off on Friday, piercing through daily demand at 1178.3-1185.8. This move has very likely triggered in a ton of sell stops, which in turn could have cleared the way for further downside this week towards daily demand at 1159.4-1170.8 (located just within the aforementioned weekly demand area).

4hr view: The recent descent on the 4hr scale took out both 4hr demand at 1183.8-1188.5 and 4hr support seen at 1182.5, which as you can see, then slam dunked itself into 4hr demand at 1169.2-1175.1 (located just below daily demand at 1178.3-1185.8) triggering buying/short-covering into the close.

If the 1169.2-1175.1 area continues to hold today, it’s likely we’ll see prices challenge the recently broken 4hr support (now resistance) level at 1182.5. This could be a nice place to look for intraday shorting opportunities into the market. Should a break above 1182.5 be seen this week, however, then we can likely assume that the spike seen below daily demand at 1178.3-1185.8 may have been a fakeout, and potentially begin looking for buy positions on the retest of this number up to the 4hr supply area seen at 1197.9-1193.8.

In the event that the 1169.2-1175.1 area fails to hold the market, we can very likely conclude that most of the buying pressure is now consumed from daily demand at 1178.3-1185.8, and a sell off will probably be seen down to 4hr demand coming in at 1159.4-1165.6 (located deep within the daily demand area at 1159.4-1170.8). From a risk/reward perspective, the profit potential to sell on the break of this 4hr demand area at 1169.2-1175.1 down to 1159.4-1165.6 4hr demand is not exactly what we’d call ‘tempting’. Buying (with lower timeframe confirmation) from 1159.4-1165.6 on the other hand, would be something our team may consider this week due to this 4hr demand area being located not only deep within daily demand at 1159.4-1170.8, but also positioned just within the weekly demand area mentioned above at 1130.1-1168.6 as well.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).

• Sell orders: 1182.5 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).

The post Monday 27th April: Weekly technical outlook and review (New Zealand bank holiday today) appeared first on .

Source:: Monday 27th April: Weekly technical outlook and review (New Zealand bank holiday today)