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Weekly Forex Price Action Outlook | Feb 24th – Mar 1st
Although the Euro only sold off 2 of the last 5 days, the Euro has lost significant ground, losing over 200 pips from high to low last week. The impulsive price action selling was kicked off by a bearish engulfing bar at 1.3400, which clearly communicates the bears are in control.
Key support at 1.3255 was broken last week, and the pair fell to the next level at 1.3133. Should this break, the big figure at 1.3300 is up next, but I’m expecting a mild recovering near term to about 1.3345. I’ll look to sell on rallies towards this level, where it will hopefully meet the falling dynamic resistance and 20ema.
Posting what is now the 30th daily close below the 20ema on the daily chart, the GBPUSD has been getting monkey hammered to say the least. On Thursday, the pair formed a pin bar, but anyone suggesting buying the pair based on the so called 50% pin bar pullback has just gotten cleaned and clearly does not understand how to trade trends or pin bars.
Although the pair is definitely going parabolic, I expect the selling to continue medium term with the UK just losing its AAA credit rating. I’ll sell any pullbacks towards 1.5315 and 1.5415 so look to sell on rallies until we get clear signs of a bottom and reversal.
WTI Crude Oil
Also selling off 2 of the last 5 days while getting hammered, WTI has been sold off pretty hard losing almost $5 on the week before forming a small bottom and pin bar off $92.44. I suspect any timid rallies will be sold, so I will look to sell rotations into $95 which could offer a good role reversal setup. Support does not come in till $91.45 so I will not consider a buy until a minimum pullback to the deeper level.
Forming a mild bounce after getting dropped last week, Gold has found a modicum of support around $1555/60. It should be noted the buying is a little timid at the moment, so short term I will still stick with the downtrend until I see more aggressive buying or an accumulation of positions around these levels.
Look for corrective rotations towards $1598 for price action signals to sell. If the buying is aggressive leading up to it, then I’ll either wait for a double bottom, an HL (higher low) to buy, or a higher level like $1630 to sell, but we should get our clues early this week as to whether the week will end bearish or bullish. But if $1550 fails, then the next line of defense for the bulls is the 2012 lows at $1525.
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