Weekend Update

EURUSD rallied the min 100pips I expected reaching 1.1332 as both rising 21SMA & ST uptrendline held but falling 200SMA pushed this pair down from Wednesday onward. My base case that I highlighted over the last couple updates, is that it is going to 1.05 at the very least. Once it closes below 1.08, I believe it will be a fast trip to 1.05 as all those who bought at this level will have to quickly unwind their positions. Shorts burned as it went above 1.1450 and below 1.08 longs will get burned. Shake 'em all before moving in it is intended direction. 

On fundamental front, Draghi wants the Euro down while US economy seems stronger as the Fed talking up a rate rise, which is USD bullish. However, i do wonder what will the Euro do if equity markets tank again.

From technical standpoint, the pair is now below 1.12 and 1.10 and 1.089 are the next stops. As simple as that. I will short if it makes a new low on Monday or  bounces back to 1.12. 

One pattern I like to trade is the squeeze between two SMAs. One such squeeze happened between 21/200SMAs last week, another is in the process between 21/50 on a weekly chart. So there is a possibility that a weekly 21SMA pushes the price back to 50SMA. There price gets rejected again and goes to my 1.05 target or lower or it hangs around it for some time and the trend changes as a result. Why? Because I noticed a noteworthy pattern regarding a intermediate/ major trend change in EURUSD on weekly charts. The trend seems to reverse when price is stuck between these two SMAs over at least 6 weeks. In the last 2 cases (Sep-Oct 2012 and Jun-Jul 2014), the pair was hugging 50SMA before turning for good.

GBPUSD did not bounce to my sell level but at least performed as expected after breaking 1.5331 support. So far it fell 9 days in a row and is currently sitting @1.5170 support. It either bounces right here or off 1.5120/00 range. Obvious short level is 1.5330 resistance. My bias is to buy at these support levels to profit from bounces BUT I am not bullish this pair especially below 1.50. On weekly charts, 2 large engulfing bearish candles already made a new swing low. Therefore, longs beware.

AUDUSD is a sick pair. It reached my 0.70 level and went further below. In the mean time no sign of weekly RSI divergence extering its influence. The next monthly target is 0.6760/85 level. A bounce back to 0.70 or 0.71 (shaded area) is a sell.

USDCAD is another weak commodity currency. It could not even rally in tandem with Oil and gave more ground instead. The short term uptrendline that it broke midweek gave no follow thru and price stalled at intraday support. I got suspicious and bailed out and so far I am happy I did. I am long @1.3238 targeting prior or hew highs but I will be watching the intraday support at 1.3116 in case it decides to finally dive back to 1.30. I do wonder however if I should be buying 1.3116 support instead of shorting its break.

USDJPY reversed from the underside of the broken uptrendline. The break of 120.64 support and then a retest of then 120.64 resistance gave  excellent shorting opportunities. Now it is in 119/118.50 support range. I will short more at 118.32 or 120.24/64 range above. If it gets back above 120.64, then 121.50 is likely the next target.

Good luck