Weekly Price Action & Technical Analysis Setups | Aug 11-16
EURUSD – Rejects off Key Level
The Euro rejected off a key level and 3 month high to end last week, forming a 2 bar reversal. It should be noted the 2 Bar Reversal in this case is simple a 2 day range for intraday traders to watch. Price is sitting just above short term support around 1.3312. It will need to break through this before see more downside. The next level below would be the dynamic support and daily 20ema which hasn’t been closed below since July 11th. Bulls can look to get long on pullbacks into the 20ema, while bears can look for an LH (lower high) at 3400, targeting 3313 and the 20ema.
EURJPY -Structurally Rolling Over
For the last two weeks, the EURJPY has been showing signs it wants to roll over, perhaps for a deep correction of the years uptrend. The pair has shown several characteristics of rolling over, such as A marked on the chart which is a failed breakout, B, a crucial LH (lower high) which is most common in major trend reversals, and C which is follow up impulsive selling. Also notice how the recent rally went to a key role reversal level and sold right back off.
Next up is the key 127.51 major swing level from the Feb. highs. A daily close below here puts pressure on 125 which was the June lows and buying point for the most recent rally. Bears can look to sell around 129.30, or look for a 4hr close below 128.24. Bulls will want to wait till the June lows before entering in new longs.
NOTE: There is some great analysis on import/export flows regarding the JPY which further supports JPY pairs weakening done by Citibank here.
Spot Silver – Showing Signs of Bottoming Along with Gold
Recently I’ve been calling for a complex bottom in gold which you can read about here, here and a successful pin bar signal here. Silver on the other hand hasn’t lifted off the bottom as much as its big brother PM. However, its formed a couple of technical price action cues a bottom is likely to be in place with A – two HLs, B – a pin bar rejection with follow up buying and C- a sustained daily close above the 20ema and key level.
The buying over the last three days has taken out the last 12 days of selling, and the impulsive moves are now moreso on the bull side than bear side, so my bias short and medium term is up. I’ve been long since 19.45, and am gunning for the 22 key role reversal level target. Short term if it can clear 20.59 which is the July high, then 21.33 is the only thing that stands in the way of my upside 22 target. Bulls can look to get long on pullbacks into 20 or the daily 20ema. Bears will want to wait for 21.33, or 22 before getting short.
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