Weekly Price Action Chart Analysis – Super Bowl Edition | Feb 2-7
Happy Super Bowl Sunday to all!
EURUSD – Bearish Tone Short Term Dominates
As we suggested in our 2014 EURUSD currency market outlook, along with our weekly price action commentary last week, the EURUSD looked prime for a sell-off in the month of January, and it obliged. We suggested selling in the 1.3640-1.3700 resistance zone, and this held price action in check with no closes above this level. Anyone selling in this zone would have profited heavily so congrats to them.
We favor staying bearish short term, so will look to short on pullbacks into 1.3600 and 1.3640. Downside targets now become the key support level at the 1.3324/3300 area. Bulls will need to wait till these lower levels before considering longs.
Spot Gold – Sitting At Key Bullish Flag/Channel Support
After holding the line at the 1182 multi-year support level, Gold has been gaining ground consistently for the month of January. Now the precious metal is in a bullish flag/channel, sitting at the bottom of that channel as we speak, so critical that holds for the short term bullish outlook. The key level to watch for the next day or two would be the 1238/40 short term support level. If this holds, then perhaps another round-trip to the top of the channel around 1275, so plenty of upside. Bears should note the last three rejections off the channel support were pretty rapid, with this being the first time its held closely to the level.
Nikkei 225 – Looking Incredibly Weak Compared to Most Indices
While all the major European and US indices rallied into the weekly close, the Nikkei 225 ended up on the lows. Looking at the intra-day charts below, we can see how the latest bull rally ran into the first layer of resistance, and found heavy sellers waiting, pushing lower into the close. We remain bearish as we’ve been suggesting here and here. We will consider selling into the first resistance zone around 14750/775. If this fails to hold short term, we’ll sell higher up around the 14915-30 area and then again at 15000. Downside targets are 14590, looking for a much deeper sell-off towards 13975.
Make sure to check out our latest Price Action Trades of the Week – Feb 1st
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