Trading stocks, Options on Stocks, Futures, Options on Futures and retail off-exchange foreign currency transactions (FOREX) involves substantial risk of loss and is not suitable for all investors. Past performance whether actual or indicated by historical test of strategies, is no guarantee of future performance or success.
There is a possibility that you may sustain a loss equal or greater than your entire investment regardless of which asset class you trade (equities, options, futures or forex); therefore, you should not invest or risk money that you can’t afford to lose.
TradeGuider Ltd is an authorised representative of forexmax Ltd and regulated by the Financial Conduct Authority number 229906.
In this week’s Forex market analysis, we’ll concentrate on the major currency pairs, AUDUSD, EURUSD, GBPUSD and USDJPY.
Forex Market Analysis: AUDUSD
We saw the Australian Dollar rally last week against the U.S. Dollar. Up until around the UK elections where we’ve had a slight pullback. The chart above is the 4-hour chart and as you can see at points A, B & C each time we had weakness enter the market with a No Demand VSA principle, there was a slight pullback. Each time on the pullback you will see low volume on the down bars.
At point B the price action was interesting. We say a Sign of Weakness followed by a test which was on slightly higher volume. No, this test was not confirmed, but the bar looked like a test. The price was driven down, and the bar closed in the middle of the range. We saw continued strength in the currency pair, until the 3rd No Demand at point C. The No Demand signal was confirmed but look at the volume on the down bars, low volume signalling there is no intention in driving the price lower.
There was a widespread up bar which broke a previous top, resistance which shows continued strength. Now the price has pulled back towards the support level, and at this level, we’ll look for testing or no supply, and this will give us further strength. The AUDUSD looks likely to test the previous highs around 0.77000. That area is certainly an area of distribution.
The Smart Center Pro software at this stage is showing weakness in the smaller timeframes and mixed signals in the higher timeframes. A break below 0.7520, we’re likely to see 0.7450 tested, as test around 0.7520, we’re like see a retest of the previous highs at 0.7566.
Forex Market Analysis: GBPUSD
Last week we saw a gap down in the GBPUSD based on news out of the UK elections. The price bar at point A is a significant area and is a telegram from the smart money. The VSA principle that appeared was a sign of strength 16 Test after Shakeout. The smart money is positioning themselves at lower prices and is testing to see if there are any further sellers in the market. The shakeout bar closed towards the high. With the VSA methodology when there is a shakeout, we would like to see a test of the shakeout. This occurs at point B, a sign of strength 11 Basic Test. This test was confirmed and we are starting to witness higher prices. Key levels to look out for this week will be 1.2780 and 1.2840.
The Smart Center Pro is showing us trend alignment in the smaller timeframes and a mixed bag in the higher timeframes. At this stage, there is strength in the background of the GBPUSD currency pair and looks like we may have continued strength as time progresses.
Forex Market Analysis: EURUSD
The EURUSD has been trading within a range since the 16th May 2017. It’s trading between the high of 1.1289 and a low of 1.1109. The price bar at point A is a Trap Up Move, a sign of weakness 58. Even though this VSA principle was not confirmed, this is still a major sign of weakness. A trap up move is a manoeuvre by the smart money to trap the retail traders into long trades. They raise the price up, only to slam it down and the bar closes on it’s lows. What I will be looking for is a No Demand, as a sign of weakness for a shorting opportunity. If it does present itself, then we’ll likely see the EURUSD travel down to the bottom of the range at 1.1109. If there is continued strength and by strength, I mean a test or no supply bars, then the top of the range will be likely tested.
Smart Center Pro is showing us mainly consolidation amongst the timeframes at this stage, but I’m looking for weakness unless professional activity change their minds.
Forex Market Analysis – USDJPY
USDJPY has been in consolidation for some time as well, but there are a couple of areas I would like to draw your attention to. Points A and B are areas of ultra-high volume and are the area where I have set my trigger point, 110.32. At point B we have a sign of weakness SOW 7 Supply Coming In. This weakness has occurred around our ultra-high volume bars. If we get confirmation of this signal, the low of 108.10 is a likely area for this currency pair to head back down towards.
Smart center pro is showing weakness in the bigger timeframes and is indicating a mixed bag on the lower timeframes. With continued weakness in the larger timeframes, I would suspect we should see lower prices. We’ll keep a close eye on this, and a No Demand signal will prompt me for a shorting opportunity.
Have an excellent trading week
Professional Investor & VSA Expert
Author of “Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis.”
Have an excellent trading day
Professional Investor and VSA Expert
Author of Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis