For the week of 5/31/21
Euro, British pound, JPY, NZD, CHF, AUD all have had strong uptrend starting May 28 historically for the first week, with a corresponding drop in the USDX for a week. After this first week in June, the USD tends to range until the end of june. Ranging markets kill the trend traders but there's lots of good short term trades that can be taken. I'll be looking at buys on Cable, Fiber, and JPY this week. While the CAD is supposed to trend up, oil is supposed to be trending down. I t hink post COVID with everything opening up and economies restarting, oil will continue to rise so I'll expect some strength in the CAD as well. You can see the cursor over the May 28 trough. Every major looks like this for the first week of June.
For Cable and Fiber, I'm aware we're in a decision making area and that if we trend up, it'll be for some short term targets before a drop or a range. Means on the USD pairs, I won't keep anything open over the weekend.
Here's the levels I have my eye on.
GBPJPY shot up last week and didn't retrace at all. The old high from the weekly was 156.60 from January 2018 and it looks like we'll run up and hit that. The 4h shows price stepping up and then ranging for 8-12 days with some stabs above and below, the ranges shown in blue. If we're repeating, we'd be entering into a range and the top of the 133 pip range would take us above 156.60 and to the 4h FE of 156.96. The weekly FE would be 157.332. I'm favoring a ranging market and probably a floor of 155.50 as that's how the last two behaved. What I'll be looking for is a stab below this range or near the bottom of it at 155.50-60, a stab above the last peak of 156.07, then to buy at the 61.8% retracement of that newly formed swing and hold until the last peak is hit again. All positions closed before the 156.60. If we are clearing out the old highs, there's a lot of longs in this market and when the old highs are hit, there will be a lot more longs added that will either catapult the pair or give lots of opportunities to close positions by the banks so I expect a lot of volume and I don't expect it to take 8-12 days to get there.
EURUSD weekly shows we're in an old price pivot zone, where lots of ranging has occurred in the past. That weekly top is 1.2550 from Feb 2018. We tend to stay inside the range so we're unlikely to break this top. The 1H has shown a strong rejection of Friday's downward move and then cleared Friday's high. It was a great way to trap the bears and knock out the stops and a very strong break in market structure. If the seasonal tendencies hold true, we'd be buying this week but because of where we are on the charts I'll be favoring a ranging or buy. The next target is the 100 fib ext which is 1.2451. This is 260 pips above Monday's market open and unlikely we'll reach that high next week. The weekly ATR is 151 pips. The 1H shows that ATR target at 1.2350. It could go up to 1.2450, but I see that as unlikely. I'll be a bull or favor a range this week. As always, I expect Monday to be the opposite of the weekly candle, so a sluggish Monday down will provide a safe entry for a buy. The daily MACD is bearish. No long term trades on this currency until the market shows intention. I'll be looking for 30-50 pip moves and not to catch the weekly candle.
GBPUSD is in the same spot. To move up, we'd have to break the old high and I'd expect more of a stop run than a really stong upward continuation. I'm favoring buys or a range on the GBPUSD this week. No longer term holds. 30-50 pips only.
Ranging weeks tend to respect WPS/R so I'll have my eyes on those too.
EURGBP showed some strong action to the downside. If this current move down is harmonic to the last two, it would put the target at 0.8530-40. Both the last downward swings had very little pause and continued. If this behaves the same way, we wouldn't expect a larger upward swing. If it does retrace this week, the K area is 0.8611-18 seen on the hourly chart. Could put a stop above that location. If you just sold Monday, your SL would be about 30 pips and TP would be about 45 pips, so not too bad. I like this pair because it trends well. If you can get into one of the trends, you can hang on for several weeks sometimes.
Sive is looking at the AUDUSD for a sell. I did add a small sell position that has a little draw down with the stops above the right shoulder. It's a good safe trade right at the neckline.