May (WK2) Market Update

This week the Forex Market proved the overall USDollar weakness. On all the majors and minors the American currency showed its current fragility and the charts are now showing an overall trend behaviour. The only exception is the USDJPY which is still in its very own zen moment and showing no signal of getting away from the range that has been the rule for the last months – between 122 and 118.

Regarding the Indices, the European side is still at the pullback that started a couple of weeks ago while the American are now retesting bit still not breaking the resistance level we have been mentioning for the past few weeks.

In Asia, Hang Seng closed the week on the upside after a lot of indecision while the Nikkei it is also showing some growth after the big drop last week.

As for the main commodities, Gold and Silver finally showing some strength although not yet breaking the resistance level in a convincing way while the Crude price keeps demonstrating clear and steady uptrend behaviour.

 

Best Trades this week

  1. GBPUSD (Daily Chart) – Continuation long – 05.05.2015 – After the moving averages crossing and becoming in the right order again, this (aggressive) trade was taken after the bounce and when price action showed us an engulfing buyer bar. Currently at around 4% in profit, we will manage this trade according to the visible uptrend price behaviour now.

20150517_GBP

EFFECT OF THE NEWS LOOKING FORWARD

Regarding the news, and trading wise, next week should only start on Tuesday after the Bank Holidays and the G8 meetings on Monday. These meetings will be the main concern all week.

Reading the current charts, and facing the overall trend behaviour we are now facing, we obviously recommend:

  • EURUSD and most EUR crosses – we are waiting for the price to pull back and for the right signals from the charts to allow us to jump in these new trends;
  • GBP:USD and most GBP crosses – the Sterling is also showing a renewed strength so it is only natural that these crosses are all showing uptrend behaviour. We will act accordingly;

Note: EUR:GBP is in a ranging period right now so we will wait for a clear direction first;

  • AUD, CAD, NZD against USD – as the USDollar is very weak at the moment, these pairs are also obvious targets for some trading opportunities;
  • USD:JPY – we will wait for any breaks on this pair as price is stuck between support and resistance levels. We can also notice an ascending triangle that some analysts consider to be one of the technical patterns that this (and some of the Yen crosses) respects the most:

20150517_JPY

Indices: in Europe most Indices are still within the pullback moves so we are paying very close attention to the next moves as if they continue to show the apparent decision from Friday, we are eager to get in this next move; As for the American side, and repeating what we are saying for the last weeks, there is still no signal of a break to the upside and the resistance level remains the only obvious thing on our charts; on the Asian side we are also looking forward to let price let us know when the next upside move will start.

Gold and Silver are very close to become interesting once again as the week closed very close to the upper level that has been acting as a true barrier for the last weeks. Price will dictate the next move as usual as we are looking for the first pullback along with the right price action after the break to the upside.